Correlation Between Ford and RADIANCE HLDGS

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Can any of the company-specific risk be diversified away by investing in both Ford and RADIANCE HLDGS 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 RADIANCE HLDGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and RADIANCE HLDGS GRPHD 01, you can compare the effects of market volatilities on Ford and RADIANCE HLDGS 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 RADIANCE HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and RADIANCE HLDGS.

Diversification Opportunities for Ford and RADIANCE HLDGS

FordRADIANCEDiversified AwayFordRADIANCEDiversified Away100%
0.56
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Ford and RADIANCE is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and RADIANCE HLDGS GRPHD 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RADIANCE HLDGS GRPHD 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 RADIANCE HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RADIANCE HLDGS GRPHD has no effect on the direction of Ford i.e., Ford and RADIANCE HLDGS go up and down completely randomly.

Pair Corralation between Ford and RADIANCE HLDGS

Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.48 times more return on investment than RADIANCE HLDGS. However, Ford Motor is 2.07 times less risky than RADIANCE HLDGS. It trades about -0.08 of its potential returns per unit of risk. RADIANCE HLDGS GRPHD 01 is currently generating about -0.22 per unit of risk. If you would invest  1,073  in Ford Motor on October 21, 2024 and sell it today you would lose (55.00) from holding Ford Motor or give up 5.13% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy97.5%
ValuesDaily Returns

Ford Motor  vs.  RADIANCE HLDGS GRPHD 01

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -20-15-10-50510
JavaScript chart by amCharts 3.21.15F RDH
       Timeline  
Ford Motor 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ford Motor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Ford is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan9.51010.51111.5
RADIANCE HLDGS GRPHD 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days RADIANCE HLDGS GRPHD 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, RADIANCE HLDGS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.320.340.360.380.40.420.440.46

Ford and RADIANCE HLDGS Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.19-2.39-1.59-0.790.00.771.552.323.09 0.020.040.060.080.10
JavaScript chart by amCharts 3.21.15F RDH
       Returns  

Pair Trading with Ford and RADIANCE HLDGS

The main advantage of trading using opposite Ford and RADIANCE HLDGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, RADIANCE HLDGS 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 RADIANCE HLDGS will offset losses from the drop in RADIANCE HLDGS's long position.
The idea behind Ford Motor and RADIANCE HLDGS GRPHD 01 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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