Correlation Analysis Between Ford Motor and Alcoa

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 and Alcoa.
Horizon     30 Days    Login   to change
Symbolsvs

Ford Motor Company  vs.  Alcoa Corp.

 Performance (%) 
      Timeline 

Pair Volatility

Taking into account the 30 trading days horizon, Ford Motor Company is expected to under-perform the Alcoa. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor Company is 1.77 times less risky than Alcoa. The stock trades about -0.15 of its potential returns per unit of risk. The Alcoa Corporation is currently generating about -0.08 of returns per unit of risk over similar time horizon. 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 Ford Motor and Alcoa

-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 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.

Comparative Volatility

 Predicted Return Density 
      Returns 
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.
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.

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