Correlation Analysis Between Microsoft and Ford Motor

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

Microsoft  
2323

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft Corporation are ranked lower than 23 (%) of all global equities and portfolios over the last 30 days. In spite of comparatively weak essential indicators, Microsoft unveiled solid returns over the last few months and may actually be approaching a breakup point.
Ford Motor  
11

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor Company are ranked lower than 1 (%) of all global equities and portfolios over the last 30 days. In spite of rather sound fundamental drivers, Ford Motor is not utilizing all of its potentials. The new stock price tumult, may contribute to shorter-term losses for the shareholders.

Microsoft and Ford Motor Volatility Contrast

 Predicted Return Density 
    
  Returns 

Microsoft Corp.  vs.  Ford Motor Company

 Performance (%) 
    
  Timeline 

Pair Volatility

Given the investment horizon of 30 days, Microsoft Corporation is expected to generate 0.59 times more return on investment than Ford Motor. However, Microsoft Corporation is 1.7 times less risky than Ford Motor. It trades about 0.35 of its potential returns per unit of risk. Ford Motor Company is currently generating about 0.03 per unit of risk. If you would invest  13,843  in Microsoft Corporation on December 18, 2019 and sell it today you would earn a total of  2,760  from holding Microsoft Corporation or generate 19.94% return on investment over 30 days.

Pair Corralation between Microsoft and Ford Motor

0.62
Time Period3 Months [change]
DirectionPositive 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for Microsoft and Ford Motor

Microsoft Corp. diversification synergy

Poor diversification

Overlapping area represents the amount of risk that can be diversified away by holding Microsoft Corp. and Ford Motor Company in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Ford Motor and Microsoft 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 Microsoft Corporation 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 Microsoft i.e. Microsoft and Ford Motor go up and down completely randomly.
See also your portfolio center. Please also try Volatility Analysis module to get historical volatility and risk analysis based on latest market data.