Correlation Between LOBO EV and Ford

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

By analyzing existing cross correlation between LOBO EV TECHNOLOGIES and Ford Motor, you can compare the effects of market volatilities on LOBO EV and Ford 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 LOBO EV with a short position of Ford. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOBO EV and Ford.

Diversification Opportunities for LOBO EV and Ford

0.06

Correlation Coefficient

LOBO EV  Ford

Significant diversification

The 3 months correlation between LOBO and Ford is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding LOBO EV TECHNOLOGIES and Ford Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ford Motor and LOBO EV 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 LOBO EV TECHNOLOGIES are associated (or correlated) with Ford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ford Motor has no effect on the direction of LOBO EV i.e., LOBO EV and Ford go up and down completely randomly.

Pair Corralation between LOBO EV and Ford

Given the investment horizon of 90 days LOBO EV TECHNOLOGIES is expected to generate 17.32 times more return on investment than Ford. However, LOBO EV is 17.32 times more volatile than Ford Motor. It trades about 0.06 of its potential returns per unit of risk. Ford Motor is currently generating about -0.1 per unit of risk. If you would invest  193.00  in LOBO EV TECHNOLOGIES on September 12, 2024 and sell it today you would earn a total of  26.90  from holding LOBO EV TECHNOLOGIES or generate 13.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

LOBO EV TECHNOLOGIES  vs.  Ford Motor

LOBO EV TECHNOLOGIES

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LOBO EV TECHNOLOGIES are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental drivers, LOBO EV displayed solid returns over the last few months and may actually be approaching a breakup point.

Ford Motor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ford Motor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ford is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with LOBO EV and Ford

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

The idea behind LOBO EV TECHNOLOGIES and Ford Motor 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.