Correlation Between Aquagold International and GM
Can any of the company-specific risk be diversified away by investing in both Aquagold International and GM at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Aquagold International and GM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquagold International and General Motors, you can compare the effects of market volatilities on Aquagold International 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 Aquagold International with a short position of GM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and GM.
Diversification Opportunities for Aquagold International and GM
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aquagold and GM is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and General Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Motors and Aquagold International 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 Aquagold International 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 Aquagold International i.e., Aquagold International and GM go up and down completely randomly.
Pair Corralation between Aquagold International and GM
Given the investment horizon of 90 days Aquagold International is expected to under-perform the GM. In addition to that, Aquagold International is 10.68 times more volatile than General Motors. It trades about -0.22 of its total potential returns per unit of risk. General Motors is currently generating about -0.12 per unit of volatility. If you would invest 5,230 in General Motors on October 13, 2024 and sell it today you would lose (245.00) from holding General Motors or give up 4.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Aquagold International vs. General Motors
Performance |
| Timeline |
| Aquagold International |
| General Motors |
Aquagold International and GM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquagold International and GM
The main advantage of trading using opposite Aquagold International and GM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, GM can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in GM will offset losses from the drop in GM's long position.| Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
| GM vs. Canoo Inc | GM vs. Aquagold International | GM vs. Morningstar Unconstrained Allocation | GM vs. Thrivent High Yield |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |