Correlation Between Ford and Navistar International
Can any of the company-specific risk be diversified away by investing in both Ford and Navistar International 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 Navistar International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Navistar International, you can compare the effects of market volatilities on Ford and Navistar International 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 Navistar International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Navistar International.
Diversification Opportunities for Ford and Navistar International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ford and Navistar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Navistar International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navistar International 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 Navistar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navistar International has no effect on the direction of Ford i.e., Ford and Navistar International go up and down completely randomly.
Pair Corralation between Ford and Navistar International
If you would invest 1,312 in Ford Motor on December 30, 2023 and sell it today you would earn a total of 16.00 from holding Ford Motor or generate 1.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Ford Motor vs. Navistar International
Performance |
Timeline |
Ford Motor |
Navistar International |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Ford and Navistar International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ford and Navistar International
The main advantage of trading using opposite Ford and Navistar International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Navistar International 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 Navistar International will offset losses from the drop in Navistar International's long position.Ford vs. Lotus Technology Warrants | Ford vs. GreenPower Motor | Ford vs. Mullen Automotive | Ford vs. HYZON Motors |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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