Correlation Analysis Between Merck and Ford Motor

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

Merck  
33

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Merck Company are ranked lower than 3 (%) of all global equities and portfolios over the last 30 days. Regardless of fairly consistent technical and fundamental indicators, Merck is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.
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 sluggish 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.

Merck and Ford Motor Volatility Contrast

 Predicted Return Density 
      Returns 

Merck Company Inc  vs.  Ford Motor Company

 Performance (%) 
      Timeline 

Pair Volatility

Considering 30-days investment horizon, Merck Company is expected to generate 0.74 times more return on investment than Ford Motor. However, Merck Company is 1.36 times less risky than Ford Motor. It trades about 0.05 of its potential returns per unit of risk. Ford Motor Company is currently generating about -0.09 per unit of risk. If you would invest  8,139  in Merck Company on September 17, 2019 and sell it today you would earn a total of  270.00  from holding Merck Company or generate 3.32% return on investment over 30 days.

Pair Corralation between Merck and Ford Motor

-0.44
Time Period3 Months [change]
DirectionNegative 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for Merck and Ford Motor

Merck Company Inc diversification synergy

Very good diversification

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