Correlation Between Ford and 26442UAR5

Can any of the company-specific risk be diversified away by investing in both Ford and 26442UAR5 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 26442UAR5 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ford Motor and DUK 535 15 MAR 53, you can compare the effects of market volatilities on Ford and 26442UAR5 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 26442UAR5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and 26442UAR5.

Diversification Opportunities for Ford and 26442UAR5

0.13

Correlation Coefficient

Ford  26442UAR5

Average diversification

The 3 months correlation between Ford and 26442UAR5 is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and DUK 535 15 MAR 53 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUK 535 15 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 26442UAR5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUK 535 15 has no effect on the direction of Ford i.e., Ford and 26442UAR5 go up and down completely randomly.

Pair Corralation between Ford and 26442UAR5

Taking into account the 90-day investment horizon Ford is expected to generate 2.17 times less return on investment than 26442UAR5. In addition to that, Ford is 1.02 times more volatile than DUK 535 15 MAR 53. It trades about 0.04 of its total potential returns per unit of risk. DUK 535 15 MAR 53 is currently generating about 0.1 per unit of volatility. If you would invest  9,453  in DUK 535 15 MAR 53 on December 23, 2024 and sell it today you would earn a total of  949.00  from holding DUK 535 15 MAR 53 or generate 10.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	90.16%
Values	Daily Returns

Ford Motor  vs.  DUK 535 15 MAR 53

Ford Motor

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

DUK 535 15

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DUK 535 15 MAR 53 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 26442UAR5 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ford and 26442UAR5

The main advantage of trading using opposite Ford and 26442UAR5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, 26442UAR5 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 26442UAR5 will offset losses from the drop in 26442UAR5's long position.

The idea behind Ford Motor and DUK 535 15 MAR 53 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.