Correlation Between Ford and SOUTHERN
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By analyzing existing cross correlation between Ford Motor and SOUTHERN PER CORP, you can compare the effects of market volatilities on Ford and SOUTHERN 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 SOUTHERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and SOUTHERN.
Diversification Opportunities for Ford and SOUTHERN
Significant diversification
The 3 months correlation between Ford and SOUTHERN is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and SOUTHERN PER CORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHERN PER P 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 SOUTHERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHERN PER P has no effect on the direction of Ford i.e., Ford and SOUTHERN go up and down completely randomly.
Pair Corralation between Ford and SOUTHERN
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the SOUTHERN. In addition to that, Ford is 2.85 times more volatile than SOUTHERN PER CORP. It trades about -0.47 of its total potential returns per unit of risk. SOUTHERN PER CORP is currently generating about -0.19 per unit of volatility. If you would invest 10,872 in SOUTHERN PER CORP on September 24, 2024 and sell it today you would lose (199.00) from holding SOUTHERN PER CORP or give up 1.83% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
Ford Motor vs. SOUTHERN PER CORP
Performance |
Timeline |
Ford Motor |
SOUTHERN PER P |
Ford and SOUTHERN Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ford and SOUTHERN
The main advantage of trading using opposite Ford and SOUTHERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, SOUTHERN 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 SOUTHERN will offset losses from the drop in SOUTHERN's long position.The idea behind Ford Motor and SOUTHERN PER CORP 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.SOUTHERN vs. Sensient Technologies | SOUTHERN vs. Luxfer Holdings PLC | SOUTHERN vs. Flexible Solutions International | SOUTHERN vs. BBB Foods |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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