Correlation Between Exela Technologies and Ford
Can any of the company-specific risk be diversified away by investing in both Exela Technologies 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 Exela Technologies and Ford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exela Technologies and Ford Motor, you can compare the effects of market volatilities on Exela Technologies 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 Exela Technologies with a short position of Ford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exela Technologies and Ford.
Diversification Opportunities for Exela Technologies and Ford
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Exela and Ford is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Exela Technologies and Ford Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ford Motor and Exela Technologies 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 Exela Technologies 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 Exela Technologies i.e., Exela Technologies and Ford go up and down completely randomly.
Pair Corralation between Exela Technologies and Ford
Given the investment horizon of 90 days Exela Technologies is expected to under-perform the Ford. In addition to that, Exela Technologies is 2.74 times more volatile than Ford Motor. It trades about -0.28 of its total potential returns per unit of risk. Ford Motor is currently generating about -0.07 per unit of volatility. If you would invest 1,329 in Ford Motor on January 30, 2024 and sell it today you would lose (50.00) from holding Ford Motor or give up 3.76% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Exela Technologies vs. Ford Motor
Performance |
Timeline |
Exela Technologies |
Ford Motor |
Exela Technologies and Ford Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Exela Technologies and Ford
The main advantage of trading using opposite Exela Technologies and Ford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exela Technologies 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.Exela Technologies vs. HeartCore Enterprises | Exela Technologies vs. Infobird Co | Exela Technologies vs. QuhuoLtd | Exela Technologies vs. CXApp 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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