Correlation Between Ford and Sparindex INDEX
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By analyzing existing cross correlation between Ford Motor and Sparindex INDEX OMX, you can compare the effects of market volatilities on Ford and Sparindex INDEX 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 Sparindex INDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Sparindex INDEX.
Diversification Opportunities for Ford and Sparindex INDEX
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ford and Sparindex is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Sparindex INDEX OMX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparindex INDEX OMX 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 Sparindex INDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparindex INDEX OMX has no effect on the direction of Ford i.e., Ford and Sparindex INDEX go up and down completely randomly.
Pair Corralation between Ford and Sparindex INDEX
Taking into account the 90-day investment horizon Ford Motor is expected to generate 2.18 times more return on investment than Sparindex INDEX. However, Ford is 2.18 times more volatile than Sparindex INDEX OMX. It trades about 0.03 of its potential returns per unit of risk. Sparindex INDEX OMX is currently generating about -0.01 per unit of risk. If you would invest 1,144 in Ford Motor on January 26, 2024 and sell it today you would earn a total of 151.00 from holding Ford Motor or generate 13.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Ford Motor vs. Sparindex INDEX OMX
Performance |
| Timeline |
| Ford Motor |
| Sparindex INDEX OMX |
Ford and Sparindex INDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Sparindex INDEX
The main advantage of trading using opposite Ford and Sparindex INDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Sparindex INDEX 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 Sparindex INDEX will offset losses from the drop in Sparindex INDEX's long position.The idea behind Ford Motor and Sparindex INDEX OMX 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.| Sparindex INDEX vs. Jyske Invest Nye | Sparindex INDEX vs. Jyske Invest Nye | Sparindex INDEX vs. Jyske Invest Hjt | Sparindex INDEX vs. Jyske Invest Lange |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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