Correlation Between Ford and Marinade Staked

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

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

Diversification Opportunities for Ford and Marinade Staked

0.54

Correlation Coefficient

Ford  Marinade Staked

Very weak diversification

The 3 months correlation between Ford and Marinade is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Marinade Staked SOL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marinade Staked SOL 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 Marinade Staked. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marinade Staked SOL has no effect on the direction of Ford i.e., Ford and Marinade Staked go up and down completely randomly.

Pair Corralation between Ford and Marinade Staked

Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.31 times more return on investment than Marinade Staked. However, Ford Motor is 3.19 times less risky than Marinade Staked. It trades about -0.09 of its potential returns per unit of risk. Marinade Staked SOL is currently generating about -0.09 per unit of risk. If you would invest  1,063  in Ford Motor on December 1, 2024 and sell it today you would lose (108.00) from holding Ford Motor or give up 10.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.75%
Values	Daily Returns

Ford Motor  vs.  Marinade Staked SOL

Ford Motor

Risk-Adjusted Performance

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.

Marinade Staked SOL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marinade Staked SOL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Marinade Staked SOL shareholders.

Pair Trading with Ford and Marinade Staked

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

The idea behind Ford Motor and Marinade Staked SOL 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.