Pair Correlation Between Ford Motor and DOW

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

Pair Volatility

Taking into account the 30 trading days horizon, Ford Motor Company is expected to under-perform the DOW. In addition to that, Ford Motor is 1.24 times more volatile than DOW. It trades about -0.24 of its total potential returns per unit of risk. DOW is currently generating about -0.14 per unit of volatility. If you would invest  2,621,081  in DOW on January 23, 2018 and sell it today you would lose (141,303)  from holding DOW or give up 5.39% of portfolio value over 30 days.

Correlation Coefficient

Pair Corralation between Ford Motor and DOW
0.81

Parameters

Time Period1 Month [change]
DirectionPositive 
StrengthStrong
Accuracy95.45%
ValuesDaily Returns

Diversification

Very poor diversification

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

 Predicted Return Density 
      Returns