Correlation Between Ford and WildBrain
Can any of the company-specific risk be diversified away by investing in both Ford and WildBrain 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 WildBrain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and WildBrain, you can compare the effects of market volatilities on Ford and WildBrain 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 WildBrain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and WildBrain.
Diversification Opportunities for Ford and WildBrain
Pay attention - limited upside
The 3 months correlation between Ford and WildBrain is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and WildBrain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WildBrain 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 WildBrain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WildBrain has no effect on the direction of Ford i.e., Ford and WildBrain go up and down completely randomly.
Pair Corralation between Ford and WildBrain
If you would invest 1,244 in Ford Motor on January 26, 2024 and sell it today you would earn a total of 51.00 from holding Ford Motor or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Ford Motor vs. WildBrain
Performance |
| Timeline |
| Ford Motor |
| WildBrain |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and WildBrain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and WildBrain
The main advantage of trading using opposite Ford and WildBrain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, WildBrain 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 WildBrain will offset losses from the drop in WildBrain's long position.The idea behind Ford Motor and WildBrain 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.| WildBrain vs. NETGEAR | WildBrain vs. KNOT Offshore Partners | WildBrain vs. Freedom Internet Group | WildBrain vs. ATRenew Inc DRC |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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