This module allows you to analyze existing cross correlation between Visa Inc and Ford Motor Company. You can compare the effects of market volatilities on Visa 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 Visa with a short position of Ford Motor. See also your portfolio center
. Please also check ongoing floating volatility patterns of Visa
and Ford Motor
Visa Inc vs Ford Motor Company
Taking into account the 30 trading days horizon, Visa is expected to generate 1.77 times less return on investment than Ford Motor. But when comparing it to its historical volatility, Visa Inc is 1.12 times less risky than Ford Motor. It trades about 0.18 of its potential returns per unit of risk. Ford Motor Company is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,163 in Ford Motor Company on September 18, 2017 and sell it today you would earn a total of 61 from holding Ford Motor Company or generate 5.25% return on investment over 30 days.
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Very weak diversification
Overlapping area represents the amount of risk that can be diversified away by holding Visa 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 Visa 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 Visa Inc 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 Visa i.e. Visa and Ford Motor go up and down completely randomly.
Compared to the overall equity markets, risk-adjusted returns on investments in Visa Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 30 days.
Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor Company are ranked lower than 19 (%) of all global equities and portfolios over the last 30 days.