Correlation Between Ford and Sentinel Total

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Can any of the company-specific risk be diversified away by investing in both Ford and Sentinel Total 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 Sentinel Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Sentinel Total Return, you can compare the effects of market volatilities on Ford and Sentinel Total 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 Sentinel Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Sentinel Total.

Diversification Opportunities for Ford and Sentinel Total

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Ford and Sentinel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and SENTINEL TOTAL RETURN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Total Return 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 Sentinel Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentinel Total Return has no effect on the direction of Ford i.e., Ford and Sentinel Total go up and down completely randomly.

Pair Corralation between Ford and Sentinel Total

If you would invest  1,200  in Ford Motor on December 29, 2023 and sell it today you would earn a total of  106.00  from holding Ford Motor or generate 8.83% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Ford Motor  vs.  SENTINEL TOTAL RETURN

 Performance 
       Timeline  
Ford Motor 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
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 weak technical and fundamental indicators, Ford may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Sentinel Total Return 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Sentinel Total Return has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Sentinel Total is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ford and Sentinel Total Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ford and Sentinel Total

The main advantage of trading using opposite Ford and Sentinel Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Sentinel Total 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 Sentinel Total will offset losses from the drop in Sentinel Total's long position.
The idea behind Ford Motor and Sentinel Total Return 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.
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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