Correlation Analysis Between Ford Motor and GM

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

Ford Motor  
66

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor Company are ranked lower than 6 (%) of all global equities and portfolios over the last 30 days. In spite of rather uncertain fundamental drivers, Ford Motor may actually be approaching a critical reversion point that can send shares even higher in February 2020.
General Motors  
00

Risk-Adjusted Performance

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.

Ford Motor and GM Volatility Contrast

 Predicted Return Density 
    
  Returns 

Ford Motor Company  vs.  General Motors Company

 Performance (%) 
    
  Timeline 

Pair Volatility

Taking into account the 30 trading days horizon, Ford Motor Company is expected to generate 0.81 times more return on investment than GM. However, Ford Motor Company is 1.24 times less risky than GM. It trades about 0.1 of its potential returns per unit of risk. General Motors Company is currently generating about -0.01 per unit of risk. If you would invest  860.00  in Ford Motor Company on December 23, 2019 and sell it today you would earn a total of  60.00  from holding Ford Motor Company or generate 6.98% return on investment over 30 days.

Pair Corralation between Ford Motor and GM

-0.12
Time Period3 Months [change]
DirectionNegative 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for Ford Motor and GM

Ford Motor Company diversification synergy

Good diversification

Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor Company and General Motors Company in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on General Motors 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 GM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Motors has no effect on the direction of Ford Motor i.e. Ford Motor and GM go up and down completely randomly.
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