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.
 Time 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 Company is expected to under-perform the Best Buy. In addition to that, Ford Motor is 1.38 times more volatile than Best Buy Co Inc. It trades about -0.12 of its total potential returns per unit of risk. Best Buy Co Inc is currently generating about 0.58 per unit of volatility. If you would invest  6,711  in Best Buy Co Inc on December 22, 2017 and sell it today you would earn a total of  975  from holding Best Buy Co Inc or generate 14.53% return on investment over 30 days.

Correlation Coefficient

Pair Corralation between Ford Motor and Best Buy
-0.28

Parameters

Time Period1 Month [change]
DirectionNegative 
StrengthInsignificant
Accuracy90.0%
ValuesDaily Returns

Diversification

Very good 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

  
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.

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.