Correlation Between Ford and QMC Quantum

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

By analyzing existing cross correlation between Ford Motor and QMC Quantum Minerals, you can compare the effects of market volatilities on Ford and QMC Quantum 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 QMC Quantum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and QMC Quantum.

Diversification Opportunities for Ford and QMC Quantum

-0.17

Correlation Coefficient

Ford  QMC Quantum

Good diversification

The 3 months correlation between Ford and QMC is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and QMC Quantum Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QMC Quantum Minerals 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 QMC Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QMC Quantum Minerals has no effect on the direction of Ford i.e., Ford and QMC Quantum go up and down completely randomly.

Pair Corralation between Ford and QMC Quantum

Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the QMC Quantum. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 3.58 times less risky than QMC Quantum. The stock trades about -0.31 of its potential returns per unit of risk. The QMC Quantum Minerals is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  5.00  in QMC Quantum Minerals on October 1, 2024 and sell it today you would earn a total of  0.50  from holding QMC Quantum Minerals or generate 10.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

Ford Motor  vs.  QMC Quantum Minerals

Ford Motor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ford Motor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Ford is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

QMC Quantum Minerals

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in QMC Quantum Minerals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, QMC Quantum may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ford and QMC Quantum

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

The idea behind Ford Motor and QMC Quantum Minerals 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.