Correlation Between Destiny Tech100 and GM
Can any of the company-specific risk be diversified away by investing in both Destiny Tech100 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 Destiny Tech100 and GM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Destiny Tech100 and General Motors, you can compare the effects of market volatilities on Destiny Tech100 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 Destiny Tech100 with a short position of GM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Destiny Tech100 and GM.
Diversification Opportunities for Destiny Tech100 and GM
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Destiny and GM is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Destiny Tech100 and General Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Motors and Destiny Tech100 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 Destiny Tech100 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 Destiny Tech100 i.e., Destiny Tech100 and GM go up and down completely randomly.
Pair Corralation between Destiny Tech100 and GM
Given the investment horizon of 90 days Destiny Tech100 is expected to generate 6.96 times more return on investment than GM. However, Destiny Tech100 is 6.96 times more volatile than General Motors. It trades about 0.39 of its potential returns per unit of risk. General Motors is currently generating about 0.07 per unit of risk. If you would invest 1,178 in Destiny Tech100 on August 29, 2024 and sell it today you would earn a total of 3,181 from holding Destiny Tech100 or generate 270.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Destiny Tech100 vs. General Motors
Performance |
| Timeline |
| Destiny Tech100 |
| General Motors |
Destiny Tech100 and GM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Destiny Tech100 and GM
The main advantage of trading using opposite Destiny Tech100 and GM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Destiny Tech100 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.| Destiny Tech100 vs. NFT Limited | Destiny Tech100 vs. Enlivex Therapeutics | Destiny Tech100 vs. Wisekey International Holding | Destiny Tech100 vs. Sphere 3D Corp |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |