Correlation Between Ford and KINDER
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By analyzing existing cross correlation between Ford Motor and KINDER MORGAN INC, you can compare the effects of market volatilities on Ford and KINDER 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 KINDER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and KINDER.
Diversification Opportunities for Ford and KINDER
Average diversification
The 3 months correlation between Ford and KINDER is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and KINDER MORGAN INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINDER MORGAN INC 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 KINDER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINDER MORGAN INC has no effect on the direction of Ford i.e., Ford and KINDER go up and down completely randomly.
Pair Corralation between Ford and KINDER
Taking into account the 90-day investment horizon Ford is expected to generate 71.66 times less return on investment than KINDER. But when comparing it to its historical volatility, Ford Motor is 20.26 times less risky than KINDER. It trades about 0.01 of its potential returns per unit of risk. KINDER MORGAN INC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 9,293 in KINDER MORGAN INC on September 24, 2024 and sell it today you would earn a total of 247.00 from holding KINDER MORGAN INC or generate 2.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 97.59% |
Values | Daily Returns |
Ford Motor vs. KINDER MORGAN INC
Performance |
Timeline |
Ford Motor |
KINDER MORGAN INC |
Ford and KINDER Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ford and KINDER
The main advantage of trading using opposite Ford and KINDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, KINDER 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 KINDER will offset losses from the drop in KINDER's long position.The idea behind Ford Motor and KINDER MORGAN INC 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.KINDER vs. BCB Bancorp | KINDER vs. LithiumBank Resources Corp | KINDER vs. Jutal Offshore Oil | KINDER vs. Victorias Secret Co |
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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