Correlation Between Ford and Hostess Brands
Can any of the company-specific risk be diversified away by investing in both Ford and Hostess Brands 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 Hostess Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Hostess Brands, you can compare the effects of market volatilities on Ford and Hostess Brands 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 Hostess Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Hostess Brands.
Diversification Opportunities for Ford and Hostess Brands
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ford and Hostess is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Hostess Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hostess Brands 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 Hostess Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hostess Brands has no effect on the direction of Ford i.e., Ford and Hostess Brands go up and down completely randomly.
Pair Corralation between Ford and Hostess Brands
If you would invest (100.00) in Hostess Brands on January 24, 2024 and sell it today you would earn a total of 100.00 from holding Hostess Brands or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Ford Motor vs. Hostess Brands
Performance |
| Timeline |
| Ford Motor |
| Hostess Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Hostess Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Hostess Brands
The main advantage of trading using opposite Ford and Hostess Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Hostess Brands 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 Hostess Brands will offset losses from the drop in Hostess Brands' long position.The idea behind Ford Motor and Hostess Brands 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.| Hostess Brands vs. Sonos Inc | Hostess Brands vs. WPP PLC ADR | Hostess Brands vs. Academy Sports OutdoorsInc | Hostess Brands vs. Funko Inc |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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