Correlation Between Ford and CCA Industries
Can any of the company-specific risk be diversified away by investing in both Ford and CCA Industries 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 CCA Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and CCA Industries, you can compare the effects of market volatilities on Ford and CCA Industries 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 CCA Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and CCA Industries.
Diversification Opportunities for Ford and CCA Industries
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ford and CCA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and CCA Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCA Industries 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 CCA Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCA Industries has no effect on the direction of Ford i.e., Ford and CCA Industries go up and down completely randomly.
Pair Corralation between Ford and CCA Industries
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. CCA Industries
Performance |
| Timeline |
| Ford Motor |
| CCA Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and CCA Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and CCA Industries
The main advantage of trading using opposite Ford and CCA Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, CCA Industries 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 CCA Industries will offset losses from the drop in CCA Industries' long position.The idea behind Ford Motor and CCA Industries 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.| CCA Industries vs. Allegiant Travel | CCA Industries vs. Delta Air Lines | CCA Industries vs. SkyWest | CCA Industries vs. United Airlines Holdings |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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