Correlation Between Ford and CSWI Old

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

By analyzing existing cross correlation between Ford Motor and CSWI Old, you can compare the effects of market volatilities on Ford and CSWI Old 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 CSWI Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and CSWI Old.

Diversification Opportunities for Ford and CSWI Old

0.58

Correlation Coefficient

Ford  CSWI Old

Very weak diversification

The 3 months correlation between Ford and CSWI is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and CSWI Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSWI Old 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 CSWI Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSWI Old has no effect on the direction of Ford i.e., Ford and CSWI Old go up and down completely randomly.

Pair Corralation between Ford and CSWI Old

If you would invest  1,149  in Ford Motor on September 19, 2025 and sell it today you would earn a total of  182.00  from holding Ford Motor or generate 15.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Ford Motor  vs.  CSWI Old

Ford Motor

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Ford reported solid returns over the last few months and may actually be approaching a breakup point.

CSWI Old

Risk-Adjusted Performance

Weakest

Over the last 90 days CSWI Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, CSWI Old is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Ford and CSWI Old

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

The idea behind Ford Motor and CSWI Old 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.