Correlation Between Twitter and Ford
Can any of the company-specific risk be diversified away by investing in both Twitter 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 Twitter and Ford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Twitter and Ford Motor, you can compare the effects of market volatilities on Twitter 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 Twitter with a short position of Ford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Twitter and Ford.
Diversification Opportunities for Twitter and Ford
Very weak diversification
The 3 months correlation between Twitter and Ford is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Twitter and Ford Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ford Motor and Twitter 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 Twitter 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 Twitter i.e., Twitter and Ford go up and down completely randomly.
Pair Corralation between Twitter and Ford
Given the investment horizon of 90 days Twitter is expected to generate 1.37 times more return on investment than Ford. However, Twitter is 1.37 times more volatile than Ford Motor. It trades about 0.04 of its potential returns per unit of risk. Ford Motor is currently generating about 0.01 per unit of risk. If you would invest 4,701 in Twitter on December 30, 2023 and sell it today you would earn a total of 669.00 from holding Twitter or generate 14.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 28.34% |
Values | Daily Returns |
Twitter vs. Ford Motor
Performance |
Timeline |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Ford Motor |
Twitter and Ford Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Twitter and Ford
The main advantage of trading using opposite Twitter and Ford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Twitter 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.Twitter vs. United Guardian | Twitter vs. Kinetik Holdings | Twitter vs. Philip Morris International | Twitter vs. ASML Holding NV |
Ford vs. Lotus Technology Warrants | Ford vs. GreenPower Motor | Ford vs. Mullen Automotive | Ford vs. HYZON Motors |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |