This module allows you to analyze existing cross correlation between General Motors Company and Ford Motor Company. You can compare the effects of market volatilities on GM 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 GM with a short position of Ford Motor. See also your portfolio center. Please also check ongoing floating volatility patterns of GM and Ford Motor.
|Horizon||30 Days Login to change|
Over the last 30 days General Motors Company has generated negative risk-adjusted returns adding no value to investors with long positions. Even with considerably steady technical indicators, GM is not utilizing all of its potentials. The ongoing stock price chaos, may contribute to medium term losses for the stakeholders.
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.
GM and Ford Motor Volatility Contrast
Predicted Return Density
General Motors Company vs. Ford Motor Company
Allowing for the 30-days total investment horizon, General Motors Company is expected to generate 1.12 times more return on investment than Ford Motor. However, GM is 1.12 times more volatile than Ford Motor Company. It trades about -0.05 of its potential returns per unit of risk. Ford Motor Company is currently generating about -0.1 per unit of risk. If you would invest 3,874 in General Motors Company on September 16, 2019 and sell it today you would lose (248.00) from holding General Motors Company or give up 6.4% of portfolio value over 30 days.
Pair Corralation between GM and Ford Motor
|Time Period||3 Months [change]|
Diversification Opportunities for GM and Ford Motor
Very poor diversification
Overlapping area represents the amount of risk that can be diversified away by holding General Motors Company and Ford Motor Company in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Ford Motor and GM 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 General Motors 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 GM i.e. GM and Ford Motor go up and down completely randomly.
See also your portfolio center. Please also try Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..