Pair Correlation Between Ford Motor and Best Buy

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

Pair Volatility

Taking into account the 30 trading days horizon, Ford Motor is expected to generate 1.66 times less return on investment than Best Buy. But when comparing it to its historical volatility, Ford Motor Company is 1.72 times less risky than Best Buy. It trades about 0.12 of its potential returns per unit of risk. Best Buy Co Inc is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  5,390  in Best Buy Co Inc on September 22, 2017 and sell it today you would earn a total of  193  from holding Best Buy Co Inc or generate 3.58% return on investment over 30 days.

Correlation Coefficient

Pair Corralation between Ford Motor and Best Buy
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 Ford Motor Company and Best Buy Co Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Best Buy Co 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 Best Buy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Best Buy Co has no effect on the direction of Ford Motor i.e. Ford Motor and Best Buy go up and down completely randomly.

Comparative Volatility

 Predicted Return Density 
      Returns 

Ford Motor

  
8 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor Company are ranked lower than 8 (%) of all global equities and portfolios over the last 30 days.

Best Buy Co

  
8 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Best Buy Co Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 30 days.