Correlation Between Ford and Mackenzie Global

Can any of the company-specific risk be diversified away by investing in both Ford and Mackenzie Global at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ford and Mackenzie Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ford Motor and Mackenzie Global Sustainable, you can compare the effects of market volatilities on Ford and Mackenzie Global and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ford with a short position of Mackenzie Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Mackenzie Global.

Diversification Opportunities for Ford and Mackenzie Global

0.19

Correlation Coefficient

Ford  Mackenzie Global

Average diversification

The 3 months correlation between Ford and Mackenzie is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Mackenzie Global Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Global Sus and Ford is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ford Motor are associated (or correlated) with Mackenzie Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Global Sus has no effect on the direction of Ford i.e., Ford and Mackenzie Global go up and down completely randomly.

Pair Corralation between Ford and Mackenzie Global

Taking into account the 90-day investment horizon Ford is expected to generate 1.66 times less return on investment than Mackenzie Global. In addition to that, Ford is 3.44 times more volatile than Mackenzie Global Sustainable. It trades about 0.04 of its total potential returns per unit of risk. Mackenzie Global Sustainable is currently generating about 0.21 per unit of volatility. If you would invest  2,603  in Mackenzie Global Sustainable on December 29, 2024 and sell it today you would earn a total of  207.00  from holding Mackenzie Global Sustainable or generate 7.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ford Motor  vs.  Mackenzie Global Sustainable

Ford Motor

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Ford is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Mackenzie Global Sus

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Global Sustainable are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Mackenzie Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ford and Mackenzie Global

The main advantage of trading using opposite Ford and Mackenzie Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Mackenzie Global can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mackenzie Global will offset losses from the drop in Mackenzie Global's long position.

The idea behind Ford Motor and Mackenzie Global Sustainable pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.