Correlation Analysis Between Alcoa and Ford Motor

This module allows you to analyze existing cross correlation between Alcoa Corporation and Ford Motor Company. You can compare the effects of market volatilities on Alcoa and Ford Motor 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 Alcoa with a short position of Ford Motor. See also your portfolio center. Please also check ongoing floating volatility patterns of Alcoa and Ford Motor.
Horizon     30 Days    Login   to change
Symbolsvs

Alcoa Corp.  vs.  Ford Motor Company

 Performance (%) 
      Timeline 

Pair Volatility

Allowing for the 30-days total investment horizon, Alcoa Corporation is expected to generate 1.77 times more return on investment than Ford Motor. However, Alcoa is 1.77 times more volatile than Ford Motor Company. It trades about -0.08 of its potential returns per unit of risk. Ford Motor Company is currently generating about -0.15 per unit of risk. If you would invest  4,387  in Alcoa Corporation on August 26, 2018 and sell it today you would lose (191.00)  from holding Alcoa Corporation or give up 4.35% of portfolio value over 30 days.

Pair Corralation between Alcoa and Ford Motor

-0.04
Time Period1 Month [change]
DirectionNegative 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Diversification

Good diversification

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

Comparative Volatility

 Predicted Return Density 
      Returns 
Alcoa  
0 

Risk-Adjusted Performance

Over the last 30 days Alcoa Corporation has generated negative risk-adjusted returns adding no value to investors with long positions.
Ford Motor  
0 

Risk-Adjusted Performance

Over the last 30 days Ford Motor Company has generated negative risk-adjusted returns adding no value to investors with long positions.

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