Correlation Between Ford and Shore Capital

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

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

Diversification Opportunities for Ford and Shore Capital

0.0

Correlation Coefficient

Ford  Shore Capital

Pay attention - limited upside

The 3 months correlation between Ford and Shore is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Shore Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shore Capital Group 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 Shore Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shore Capital Group has no effect on the direction of Ford i.e., Ford and Shore Capital go up and down completely randomly.

Pair Corralation between Ford and Shore Capital

If you would invest (100.00) in Shore Capital Group on September 26, 2024 and sell it today you would earn a total of  100.00  from holding Shore Capital Group or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Ford Motor  vs.  Shore Capital Group

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.

Shore Capital Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shore Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Shore Capital is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Ford and Shore Capital

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

The idea behind Ford Motor and Shore Capital Group 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.

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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.