Correlation Between Ford and NABORS
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By analyzing existing cross correlation between Ford Motor and NABORS INDS LTD, you can compare the effects of market volatilities on Ford and NABORS 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 NABORS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and NABORS.
Diversification Opportunities for Ford and NABORS
Very good diversification
The 3 months correlation between Ford and NABORS is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and NABORS INDS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NABORS INDS LTD 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 NABORS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NABORS INDS LTD has no effect on the direction of Ford i.e., Ford and NABORS go up and down completely randomly.
Pair Corralation between Ford and NABORS
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.07 times more return on investment than NABORS. However, Ford is 1.07 times more volatile than NABORS INDS LTD. It trades about 0.04 of its potential returns per unit of risk. NABORS INDS LTD is currently generating about 0.04 per unit of risk. If you would invest 957.00 in Ford Motor on December 29, 2024 and sell it today you would earn a total of 33.00 from holding Ford Motor or generate 3.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.08% |
Values | Daily Returns |
Ford Motor vs. NABORS INDS LTD
Performance |
Timeline |
Ford Motor |
NABORS INDS LTD |
Ford and NABORS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ford and NABORS
The main advantage of trading using opposite Ford and NABORS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, NABORS 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 NABORS will offset losses from the drop in NABORS's long position.The idea behind Ford Motor and NABORS INDS LTD 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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