Correlation Between Ford and ENN ENERGY
Can any of the company-specific risk be diversified away by investing in both Ford and ENN ENERGY 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 ENN ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and ENN ENERGY HLDUNSADR25, you can compare the effects of market volatilities on Ford and ENN ENERGY 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 ENN ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and ENN ENERGY.
Diversification Opportunities for Ford and ENN ENERGY
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ford and ENN is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and ENN ENERGY HLDUNSADR25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENN ENERGY HLDUNSADR25 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 ENN ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENN ENERGY HLDUNSADR25 has no effect on the direction of Ford i.e., Ford and ENN ENERGY go up and down completely randomly.
Pair Corralation between Ford and ENN ENERGY
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the ENN ENERGY. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 1.48 times less risky than ENN ENERGY. The stock trades about -0.01 of its potential returns per unit of risk. The ENN ENERGY HLDUNSADR25 is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,485 in ENN ENERGY HLDUNSADR25 on October 25, 2024 and sell it today you would earn a total of 155.00 from holding ENN ENERGY HLDUNSADR25 or generate 6.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 99.19% |
Values | Daily Returns |
Ford Motor vs. ENN ENERGY HLDUNSADR25
Performance |
Timeline |
Ford Motor |
ENN ENERGY HLDUNSADR25 |
Ford and ENN ENERGY Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ford and ENN ENERGY
The main advantage of trading using opposite Ford and ENN ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, ENN ENERGY 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 ENN ENERGY will offset losses from the drop in ENN ENERGY's long position.The idea behind Ford Motor and ENN ENERGY HLDUNSADR25 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.ENN ENERGY vs. Quaker Chemical | ENN ENERGY vs. GALENA MINING LTD | ENN ENERGY vs. ADRIATIC METALS LS 013355 | ENN ENERGY vs. Forsys Metals Corp |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Stocks Directory Find actively traded stocks across global markets | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |