Correlation Between Ford and Wesure Global

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

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

Diversification Opportunities for Ford and Wesure Global

0.23

Correlation Coefficient

Ford  Wesure Global

Modest diversification

The 3 months correlation between Ford and Wesure is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Wesure Global Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesure Global Tech 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 Wesure Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesure Global Tech has no effect on the direction of Ford i.e., Ford and Wesure Global go up and down completely randomly.

Pair Corralation between Ford and Wesure Global

Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Wesure Global. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 1.26 times less risky than Wesure Global. The stock trades about -0.01 of its potential returns per unit of risk. The Wesure Global Tech is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest  30,330  in Wesure Global Tech on September 15, 2024 and sell it today you would earn a total of  22,640  from holding Wesure Global Tech or generate 74.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	73.44%
Values	Daily Returns

Ford Motor  vs.  Wesure Global Tech

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.

Wesure Global Tech

Risk-Adjusted Performance

38 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Wesure Global Tech are ranked lower than 38 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Wesure Global sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ford and Wesure Global

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

The idea behind Ford Motor and Wesure Global Tech 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.