Correlation Between Ford and SPDR Portfolio

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Ford and SPDR Portfolio 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 SPDR Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and SPDR Portfolio SP, you can compare the effects of market volatilities on Ford and SPDR Portfolio 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 SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and SPDR Portfolio.

Diversification Opportunities for Ford and SPDR Portfolio

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between Ford and SPDR Portfolio is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and SPDR Portfolio SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio SP 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 SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio SP has no effect on the direction of Ford i.e., Ford and SPDR Portfolio go up and down completely randomly.

Pair Corralation between Ford and SPDR Portfolio

Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the SPDR Portfolio. In addition to that, Ford is 1.57 times more volatile than SPDR Portfolio SP. It trades about -0.06 of its total potential returns per unit of risk. SPDR Portfolio SP is currently generating about -0.04 per unit of volatility. If you would invest  6,924  in SPDR Portfolio SP on November 2, 2022 and sell it today you would lose (1,637)  from holding SPDR Portfolio SP or give up 23.64% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Ford Motor  vs.  SPDR Portfolio SP

 Performance (%) 
       Timeline  
Ford Motor 
Ford Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Ford is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Ford Price Channel

SPDR Portfolio SP 
SPDR Portfolio Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Portfolio SP are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, SPDR Portfolio may actually be approaching a critical reversion point that can send shares even higher in March 2023.

SPDR Portfolio Price Channel

Ford and SPDR Portfolio Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ford and SPDR Portfolio

The main advantage of trading using opposite Ford and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, SPDR Portfolio 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 SPDR Portfolio will offset losses from the drop in SPDR Portfolio's long position.
Ford vs. Arista Networks
Ford vs. SAP SE ADR
Ford vs. Community Healthcare Trust
Ford vs. Dell Technologies
The idea behind Ford Motor and SPDR Portfolio SP 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.
SPDR Portfolio vs. HUMANA INC
SPDR Portfolio vs. Unified Series Trust
SPDR Portfolio vs. Barloworld Ltd ADR
SPDR Portfolio vs. PINNACLE SHERMAN MULTI-STRATEGY
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

Other Complementary Tools

Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Money Managers
Screen money managers from public funds and ETFs managed around the world
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Bond Directory
Find actively traded corporate debentures issued by US companies
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world