Correlation Between Ford and Quarterhill
Can any of the company-specific risk be diversified away by investing in both Ford and Quarterhill 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 Quarterhill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Quarterhill, you can compare the effects of market volatilities on Ford and Quarterhill 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 Quarterhill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Quarterhill.
Diversification Opportunities for Ford and Quarterhill
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ford and Quarterhill is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Quarterhill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quarterhill 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 Quarterhill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quarterhill has no effect on the direction of Ford i.e., Ford and Quarterhill go up and down completely randomly.
Pair Corralation between Ford and Quarterhill
If you would invest 1,074 in Ford Motor on January 24, 2024 and sell it today you would earn a total of 214.00 from holding Ford Motor or generate 19.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Ford Motor vs. Quarterhill
Performance |
Timeline |
Ford Motor |
Quarterhill |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Quarterhill Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ford and Quarterhill
The main advantage of trading using opposite Ford and Quarterhill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Quarterhill 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 Quarterhill will offset losses from the drop in Quarterhill's long position.The idea behind Ford Motor and Quarterhill 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.Quarterhill vs. The Joint Corp | Quarterhill vs. Juniata Valley Financial | Quarterhill vs. AmTrust Financial Services | Quarterhill vs. Encore Capital Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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