Correlation Between Ford and Property Lease

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

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

Diversification Opportunities for Ford and Property Lease

0.0

Correlation Coefficient

Ford  Property Lease

Pay attention - limited upside

The 3 months correlation between Ford and Property is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Property Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Property Lease 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 Property Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Property Lease has no effect on the direction of Ford i.e., Ford and Property Lease go up and down completely randomly.

Pair Corralation between Ford and Property Lease

If you would invest (100.00) in Property Lease on December 5, 2024 and sell it today you would earn a total of  100.00  from holding Property Lease or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Ford Motor  vs.  Property Lease

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.

Property Lease

Risk-Adjusted Performance

Very Weak

Over the last 90 days Property Lease has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Property Lease is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ford and Property Lease

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

The idea behind Ford Motor and Property Lease 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.

Check out your portfolio center.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.