Correlation Analysis Between Ford Motor and GM

This module allows you to analyze existing cross correlation between Ford Motor Company and General Motors Company. You can compare the effects of market volatilities on Ford Motor and GM 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 GM. See also your portfolio center. Please also check ongoing floating volatility patterns of Ford Motor and GM.
Horizon     30 Days    Login   to change
Symbolsvs
Compare Efficiency

Comparative Performance

Ford Motor  
1

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor Company are ranked lower than 1 (%) of all global equities and portfolios over the last 30 days.
General Motors  
7

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in General Motors Company are ranked lower than 7 (%) of all global equities and portfolios over the last 30 days.

Ford Motor and GM Volatility Contrast

 Predicted Return Density 
      Returns 

Ford Motor Company  vs.  General Motors Company

 Performance (%) 
      Timeline 

Pair Volatility

Taking into account the 30 trading days horizon, Ford Motor is expected to generate 6.05 times less return on investment than GM. But when comparing it to its historical volatility, Ford Motor Company is 1.06 times less risky than GM. It trades about 0.02 of its potential returns per unit of risk. General Motors Company is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  3,134  in General Motors Company on November 19, 2018 and sell it today you would earn a total of  332.00  from holding General Motors Company or generate 10.59% return on investment over 30 days.

Pair Corralation between Ford Motor and GM

0.68
Time Period2 Months [change]
DirectionPositive 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for Ford Motor and GM

Ford Motor Company diversification synergy

Poor diversification

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

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