Correlation Between Ford and CVRx

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

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

Diversification Opportunities for Ford and CVRx

0.34

Correlation Coefficient

Ford  CVRx

Weak diversification

The 3 months correlation between Ford and CVRx is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and CVRx Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVRx Inc 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 CVRx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVRx Inc has no effect on the direction of Ford i.e., Ford and CVRx go up and down completely randomly.

Pair Corralation between Ford and CVRx

Taking into account the 90-day investment horizon Ford is expected to generate 1.82 times less return on investment than CVRx. But when comparing it to its historical volatility, Ford Motor is 4.33 times less risky than CVRx. It trades about 0.08 of its potential returns per unit of risk. CVRx Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  779.00  in CVRx Inc on May 5, 2025 and sell it today you would lose (23.00) from holding CVRx Inc or give up 2.95% of portfolio value over 90 days.

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

Ford Motor  vs.  CVRx Inc

Ford Motor

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical and fundamental indicators, Ford may actually be approaching a critical reversion point that can send shares even higher in September 2025.

CVRx Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CVRx Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, CVRx showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ford and CVRx

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

The idea behind Ford Motor and CVRx Inc 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.