Pair Correlation Between Ford Motor and Microsoft

This module allows you to analyze existing cross correlation between Ford Motor Co 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.
Investment Horizon     30 Days    Login   to change
 Ford Motor Co.  vs   Microsoft Corp.
 Daily Returns (%) 
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Pair Volatility

Taking into account the 30 trading days horizon, Ford Motor is expected to generate 4.54 times less return on investment than Microsoft. But when comparing it to its historical volatility, Ford Motor Co is 1.36 times less risky than Microsoft. It trades about 0.08 of its potential returns per unit of risk. Microsoft Corporation is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  5,690  in Microsoft Corporation on September 24, 2016 and sell it today you would earn a total of  410.00  from holding Microsoft Corporation or generate 7.21% return on investment over 30 days.
Correlation Coefficient
Pair Corralation between Ford Motor and Microsoft


Time Period1 Month [change]
StrengthVery Weak
ValuesDaily Returns


Weak diversification

Overlapping area represents amount of risk that can be diversified away by holding Ford Motor Co. 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 Co 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.