Correlation Between Ford and SPDR DoubleLine
Can any of the company-specific risk be diversified away by investing in both Ford and SPDR DoubleLine 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 SPDR DoubleLine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and SPDR DoubleLine Short, you can compare the effects of market volatilities on Ford and SPDR DoubleLine 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 SPDR DoubleLine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and SPDR DoubleLine.
Diversification Opportunities for Ford and SPDR DoubleLine
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ford and SPDR is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and SPDR DoubleLine Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR DoubleLine Short 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 SPDR DoubleLine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR DoubleLine Short has no effect on the direction of Ford i.e., Ford and SPDR DoubleLine go up and down completely randomly.
Pair Corralation between Ford and SPDR DoubleLine
Taking into account the 90-day investment horizon Ford Motor is expected to generate 28.0 times more return on investment than SPDR DoubleLine. However, Ford is 28.0 times more volatile than SPDR DoubleLine Short. It trades about 0.02 of its potential returns per unit of risk. SPDR DoubleLine Short is currently generating about 0.05 per unit of risk. If you would invest 1,218 in Ford Motor on January 16, 2024 and sell it today you would earn a total of 5.00 from holding Ford Motor or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. SPDR DoubleLine Short
Performance |
| Timeline |
| Ford Motor |
| SPDR DoubleLine Short |
Ford and SPDR DoubleLine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and SPDR DoubleLine
The main advantage of trading using opposite Ford and SPDR DoubleLine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, SPDR DoubleLine 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 SPDR DoubleLine will offset losses from the drop in SPDR DoubleLine's long position.| Ford vs. Hycroft Mining Holding | Ford vs. Exela Technologies | Ford vs. Aquagold International | Ford vs. Thrivent High Yield |
| SPDR DoubleLine vs. Fidelity Corporate Bond | SPDR DoubleLine vs. Fidelity Total Bond | SPDR DoubleLine vs. Fidelity High Yield | SPDR DoubleLine vs. Fidelity Momentum Factor |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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