Correlation Analysis Between Ford Motor and Microsoft

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

Ford Motor  
00

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. In spite of latest unsteady performance, the Stock's fundamental drivers remain sound and the ongoing tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
Microsoft  
00

Risk-Adjusted Performance

Over the last 30 days Microsoft Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively unchanging essential indicators, Microsoft is not utilizing all of its potentials. The prevalent stock price uproar, may contribute to short horizon losses for the leadership.

Ford Motor and Microsoft Volatility Contrast

 Predicted Return Density 
      Returns 

Ford Motor Company  vs.  Microsoft Corp.

 Performance (%) 
      Timeline 

Pair Volatility

Taking into account the 30 trading days horizon, Ford Motor Company is expected to under-perform the Microsoft. In addition to that, Ford Motor is 1.2 times more volatile than Microsoft Corporation. It trades about -0.1 of its total potential returns per unit of risk. Microsoft Corporation is currently generating about 0.01 per unit of volatility. If you would invest  13,834  in Microsoft Corporation on September 21, 2019 and sell it today you would earn a total of  9.00  from holding Microsoft Corporation or generate 0.07% return on investment over 30 days.

Pair Corralation between Ford Motor and Microsoft

0.12
Time Period3 Months [change]
DirectionPositive 
StrengthInsignificant
Accuracy98.46%
ValuesDaily Returns

Diversification Opportunities for Ford Motor and Microsoft

Ford Motor Company diversification synergy

Average diversification

Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor Company and Microsoft Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Microsoft 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 Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of Ford Motor i.e. Ford Motor and Microsoft go up and down completely randomly.
See also your portfolio center. Please also try Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.


 
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