Correlation Between Ford and IDEXX Laboratories
Can any of the company-specific risk be diversified away by investing in both Ford and IDEXX Laboratories 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 IDEXX Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and IDEXX Laboratories, you can compare the effects of market volatilities on Ford and IDEXX Laboratories 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 IDEXX Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and IDEXX Laboratories.
Diversification Opportunities for Ford and IDEXX Laboratories
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ford and IDEXX is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and IDEXX Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDEXX Laboratories 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 IDEXX Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDEXX Laboratories has no effect on the direction of Ford i.e., Ford and IDEXX Laboratories go up and down completely randomly.
Pair Corralation between Ford and IDEXX Laboratories
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.96 times more return on investment than IDEXX Laboratories. However, Ford Motor is 1.04 times less risky than IDEXX Laboratories. It trades about 0.09 of its potential returns per unit of risk. IDEXX Laboratories is currently generating about 0.07 per unit of risk. If you would invest 1,156 in Ford Motor on September 7, 2025 and sell it today you would earn a total of 147.00 from holding Ford Motor or generate 12.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Ford Motor vs. IDEXX Laboratories
Performance |
| Timeline |
| Ford Motor |
| IDEXX Laboratories |
Ford and IDEXX Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and IDEXX Laboratories
The main advantage of trading using opposite Ford and IDEXX Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, IDEXX Laboratories 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 IDEXX Laboratories will offset losses from the drop in IDEXX Laboratories' long position.| Ford vs. Equal Trading | Ford vs. Prosperity Real Estate | Ford vs. China Tontine Wines | Ford vs. Ecoloclean Industrs |
| IDEXX Laboratories vs. Sharplink Gaming | IDEXX Laboratories vs. Ainsworth Game Technology | IDEXX Laboratories vs. Champion Gaming Group | IDEXX Laboratories vs. Ping An Insurance |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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