This module allows you to analyze existing cross correlation between Ford Motor Company and Alcoa Corporation. You can compare the effects of market volatilities on Ford Motor and Alcoa 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 Alcoa. See also your portfolio center
. Please also check ongoing floating volatility patterns of Ford Motor
Ford Motor Company vs Alcoa Corp.
Taking into account the 30 trading days horizon, Ford Motor Company is expected to generate 0.49 times more return on investment than Alcoa. However, Ford Motor Company is 2.04 times less risky than Alcoa. It trades about 0.25 of its potential returns per unit of risk. Alcoa Corporation is currently generating about -0.04 per unit of risk. If you would invest 1,201 in Ford Motor Company on November 17, 2017 and sell it today you would earn a total of 57 from holding Ford Motor Company or generate 4.75% return on investment over 30 days.
|Time Period||1 Month [change]|
Very good diversification
Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor Company and Alcoa Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Alcoa 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 Alcoa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alcoa has no effect on the direction of Ford Motor i.e. Ford Motor and Alcoa go up and down completely randomly.
Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor Company are ranked lower than 16 (%) of all global equities and portfolios over the last 30 days.
Over the last 30 days Alcoa Corporation has generated negative risk-adjusted returns adding no value to investors with long positions.