Correlation Between Ford and Millennium Group

Can any of the company-specific risk be diversified away by investing in both Ford and Millennium Group 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 Millennium Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ford Motor and Millennium Group International, you can compare the effects of market volatilities on Ford and Millennium Group 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 Millennium Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Millennium Group.

Diversification Opportunities for Ford and Millennium Group

0.12

Correlation Coefficient

Ford  Millennium Group

Average diversification

The 3 months correlation between Ford and Millennium is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Millennium Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millennium Group Int 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 Millennium Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millennium Group Int has no effect on the direction of Ford i.e., Ford and Millennium Group go up and down completely randomly.

Pair Corralation between Ford and Millennium Group

Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Millennium Group. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 1.84 times less risky than Millennium Group. The stock trades about -0.04 of its potential returns per unit of risk. The Millennium Group International is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  164.00  in Millennium Group International on September 21, 2024 and sell it today you would lose (19.00) from holding Millennium Group International or give up 11.59% of portfolio value over 90 days.

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

Ford Motor  vs.  Millennium Group International

Ford Motor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ford Motor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Millennium Group Int

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Millennium Group International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Ford and Millennium Group

The main advantage of trading using opposite Ford and Millennium Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Millennium Group 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 Millennium Group will offset losses from the drop in Millennium Group's long position.

The idea behind Ford Motor and Millennium Group International 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.