Correlation Between Ford and ECARX Holdings
Can any of the company-specific risk be diversified away by investing in both Ford and ECARX Holdings 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 ECARX Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and ECARX Holdings Warrants, you can compare the effects of market volatilities on Ford and ECARX Holdings 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 ECARX Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and ECARX Holdings.
Diversification Opportunities for Ford and ECARX Holdings
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and ECARX is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and ECARX Holdings Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECARX Holdings Warrants 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 ECARX Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECARX Holdings Warrants has no effect on the direction of Ford i.e., Ford and ECARX Holdings go up and down completely randomly.
Pair Corralation between Ford and ECARX Holdings
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the ECARX Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 63.44 times less risky than ECARX Holdings. The stock trades about -0.01 of its potential returns per unit of risk. The ECARX Holdings Warrants is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2.26 in ECARX Holdings Warrants on September 25, 2024 and sell it today you would earn a total of 1.54 from holding ECARX Holdings Warrants or generate 68.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 58.06% |
Values | Daily Returns |
Ford Motor vs. ECARX Holdings Warrants
Performance |
Timeline |
Ford Motor |
ECARX Holdings Warrants |
Ford and ECARX Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ford and ECARX Holdings
The main advantage of trading using opposite Ford and ECARX Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, ECARX Holdings 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 ECARX Holdings will offset losses from the drop in ECARX Holdings' long position.The idea behind Ford Motor and ECARX Holdings Warrants 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.ECARX Holdings vs. Ford Motor | ECARX Holdings vs. General Motors | ECARX Holdings vs. Goodyear Tire Rubber | ECARX Holdings vs. Li Auto |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
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 | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |