Pair Correlation Between Best Buy and Ford Motor

This module allows you to analyze existing cross correlation between Best Buy Co Inc and Ford Motor Company. You can compare the effects of market volatilities on Best Buy 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 Best Buy with a short position of Ford Motor. See also your portfolio center. Please also check ongoing floating volatility patterns of Best Buy and Ford Motor.
Investment Horizon     30 Days    Login   to change
Symbolsvs
 Best Buy Co Inc  vs   Ford Motor Company
 Performance (%) 
      Timeline 

Pair Volatility

Considering 30-days investment horizon, Best Buy Co Inc is expected to generate 1.5 times more return on investment than Ford Motor. However, Best Buy is 1.5 times more volatile than Ford Motor Company. It trades about 0.58 of its potential returns per unit of risk. Ford Motor Company is currently generating about 0.23 per unit of risk. If you would invest  5,525  in Best Buy Co Inc on November 16, 2017 and sell it today you would earn a total of  1,007  from holding Best Buy Co Inc or generate 18.23% return on investment over 30 days.

Correlation Coefficient

Pair Corralation between Best Buy and Ford Motor
0.89

Parameters

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

Diversification

Very poor diversification

Overlapping area represents the amount of risk that can be diversified away by holding Best Buy Co Inc and Ford Motor Company in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Ford Motor and Best Buy 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 Best Buy Co Inc 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 Best Buy i.e. Best Buy and Ford Motor go up and down completely randomly.

Comparative Volatility

 Predicted Return Density 
      Returns 

Best Buy Co

  
38 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Best Buy Co Inc are ranked lower than 38 (%) of all global equities and portfolios over the last 30 days.

Ford Motor

  
15 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor Company are ranked lower than 15 (%) of all global equities and portfolios over the last 30 days.