Correlation Analysis Between DOW and Ford Motor

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

 Predicted Return Density 
    
  Returns 

DOW  vs.  Ford Motor Company

 Performance (%) 
    
  Timeline 

Pair Volatility

Given the investment horizon of 30 days, DOW is expected to generate 0.33 times more return on investment than Ford Motor. However, DOW is 3.04 times less risky than Ford Motor. It trades about 0.31 of its potential returns per unit of risk. Ford Motor Company is currently generating about 0.02 per unit of risk. If you would invest  2,682,764  in DOW on December 19, 2019 and sell it today you would earn a total of  252,046  from holding DOW or generate 9.4% return on investment over 30 days.

Pair Corralation between DOW and Ford Motor

0.61
Time Period3 Months [change]
DirectionPositive 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for DOW and Ford Motor

DOW diversification synergy

Poor diversification

Overlapping area represents the amount of risk that can be diversified away by holding DOW and Ford Motor Company in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Ford Motor and DOW 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 DOW 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 DOW i.e. DOW and Ford Motor go up and down completely randomly.
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See also your portfolio center. Please also try Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.