Correlation Analysis Between Ford Motor and Merck

This module allows you to analyze existing cross correlation between Ford Motor Company and Merck Company. You can compare the effects of market volatilities on Ford Motor and Merck 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 Merck. See also your portfolio center. Please also check ongoing floating volatility patterns of Ford Motor and Merck.
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 rather sound fundamental drivers, Ford Motor is not utilizing all of its potentials. The prevalent stock price tumult, may contribute to shorter-term losses for the shareholders.
Merck  
00

Risk-Adjusted Performance

Over the last 30 days Merck Company has generated negative risk-adjusted returns adding no value to investors with long positions. 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 and Merck Volatility Contrast

 Predicted Return Density 
      Returns 

Ford Motor Company  vs.  Merck Company Inc

 Performance (%) 
      Timeline 

Pair Volatility

Taking into account the 30 trading days horizon, Ford Motor Company is expected to under-perform the Merck. In addition to that, Ford Motor is 1.2 times more volatile than Merck Company. It trades about -0.06 of its total potential returns per unit of risk. Merck Company is currently generating about 0.0 per unit of volatility. If you would invest  8,551  in Merck Company on August 22, 2019 and sell it today you would lose (35.00)  from holding Merck Company or give up 0.41% of portfolio value over 30 days.

Pair Corralation between Ford Motor and Merck

-0.49
Time Period3 Months [change]
DirectionNegative 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for Ford Motor and Merck

Ford Motor Company diversification synergy

Very good diversification

Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor Company and Merck Company Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Merck 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 Merck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merck has no effect on the direction of Ford Motor i.e. Ford Motor and Merck go up and down completely randomly.
See also your portfolio center. Please also try Pair Correlation module to compare performance and examine historical correlation between any two equity instruments.


 
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