Correlation Between Ford and Rand Capital
Can any of the company-specific risk be diversified away by investing in both Ford and Rand 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 Rand 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 Rand Capital Corp, you can compare the effects of market volatilities on Ford and Rand 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 Rand Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Rand Capital.
Diversification Opportunities for Ford and Rand Capital
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ford and Rand is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Rand Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rand Capital Corp 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 Rand Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rand Capital Corp has no effect on the direction of Ford i.e., Ford and Rand Capital go up and down completely randomly.
Pair Corralation between Ford and Rand Capital
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.62 times more return on investment than Rand Capital. However, Ford Motor is 1.6 times less risky than Rand Capital. It trades about 0.07 of its potential returns per unit of risk. Rand Capital Corp is currently generating about -0.19 per unit of risk. If you would invest 1,116 in Ford Motor on July 20, 2025 and sell it today you would earn a total of 76.00 from holding Ford Motor or generate 6.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Rand Capital Corp
Performance |
| Timeline |
| Ford Motor |
| Rand Capital Corp |
Ford and Rand Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Rand Capital
The main advantage of trading using opposite Ford and Rand Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Rand 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 Rand Capital will offset losses from the drop in Rand Capital's long position.The idea behind Ford Motor and Rand Capital Corp 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.| Rand Capital vs. Investcorp Credit Management | Rand Capital vs. Marygold Companies | Rand Capital vs. Prestige Wealth Ordinary | Rand Capital vs. SLMT |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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