Correlation Between Ford and UBS IQ

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

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

Diversification Opportunities for Ford and UBS IQ

0.0

Correlation Coefficient

Ford  UBS IQ

Pay attention - limited upside

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

Pair Corralation between Ford and UBS IQ

If you would invest (100.00) in UBS IQ MSCI on September 30, 2024 and sell it today you would earn a total of  100.00  from holding UBS IQ MSCI 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.  UBS IQ MSCI

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.

UBS IQ MSCI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UBS IQ MSCI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental drivers, UBS IQ is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Ford and UBS IQ

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

The idea behind Ford Motor and UBS IQ MSCI 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..