Correlation Between Ford and PHENIXFIN CORP

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

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

Diversification Opportunities for Ford and PHENIXFIN CORP

0.0

Correlation Coefficient

Ford  PHENIXFIN CORP

Pay attention - limited upside

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

Pair Corralation between Ford and PHENIXFIN CORP

Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.29 times more return on investment than PHENIXFIN CORP. However, Ford is 1.29 times more volatile than PHENIXFIN P DL. It trades about 0.06 of its potential returns per unit of risk. PHENIXFIN P DL is currently generating about 0.07 per unit of risk. If you would invest  957.00  in Ford Motor on December 20, 2024 and sell it today you would earn a total of  60.00  from holding Ford Motor or generate 6.27% return on investment over 90 days.

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

Ford Motor  vs.  PHENIXFIN P DL

Ford Motor

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Ford may actually be approaching a critical reversion point that can send shares even higher in April 2025.

PHENIXFIN P DL

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PHENIXFIN P DL are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PHENIXFIN CORP may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ford and PHENIXFIN CORP

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

The idea behind Ford Motor and PHENIXFIN P DL 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.