Correlation Between Electric Last and Ford

Can any of the company-specific risk be diversified away by investing in both Electric Last and Ford 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 Electric Last and Ford into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Electric Last Mile and Ford Motor, you can compare the effects of market volatilities on Electric Last and Ford 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 Electric Last with a short position of Ford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electric Last and Ford.

Diversification Opportunities for Electric Last and Ford

0.0

Correlation Coefficient

Electric Last  Ford

Pay attention - limited upside

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

Pair Corralation between Electric Last and Ford

If you would invest  0.00  in Electric Last Mile on January 20, 2024 and sell it today you would earn a total of  0.00  from holding Electric Last Mile or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Electric Last Mile  vs.  Ford Motor

Electric Last Mile

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Electric Last Mile has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Electric Last is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Ford Motor

Risk-Adjusted Performance

6 of 100

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 unfluctuating technical and fundamental indicators, Ford may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Electric Last and Ford

The main advantage of trading using opposite Electric Last and Ford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electric Last position performs unexpectedly, Ford 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 Ford will offset losses from the drop in Ford's long position.

The idea behind Electric Last Mile and Ford Motor 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.

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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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.