Pair Correlation 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.
Investment 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 1.83 times more return on investment than Ford Motor. However, Alcoa is 1.83 times more volatile than Ford Motor Company. It trades about 0.19 of its potential returns per unit of risk. Ford Motor Company is currently generating about 0.26 per unit of risk. If you would invest  4,491  in Alcoa Corporation on September 18, 2017 and sell it today you would earn a total of  284  from holding Alcoa Corporation or generate 6.32% return on investment over 30 days.

Correlation Coefficient

Pair Corralation between Alcoa and Ford Motor
0.56

Parameters

Time Period1 Month [change]
DirectionPositive 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Diversification

Very weak 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

  
12 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Alcoa Corporation are ranked lower than 12 (%) of all global equities and portfolios over the last 30 days.

Ford Motor

  
17 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor Company are ranked lower than 17 (%) of all global equities and portfolios over the last 30 days.