Correlation Between GM and Tamburi Investment
Can any of the company-specific risk be diversified away by investing in both GM and Tamburi Investment 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 GM and Tamburi Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Tamburi Investment Partners, you can compare the effects of market volatilities on GM and Tamburi Investment 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 GM with a short position of Tamburi Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Tamburi Investment.
Diversification Opportunities for GM and Tamburi Investment
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Tamburi is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Tamburi Investment Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tamburi Investment and GM 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 General Motors are associated (or correlated) with Tamburi Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tamburi Investment has no effect on the direction of GM i.e., GM and Tamburi Investment go up and down completely randomly.
Pair Corralation between GM and Tamburi Investment
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.42 times more return on investment than Tamburi Investment. However, GM is 2.42 times more volatile than Tamburi Investment Partners. It trades about 0.19 of its potential returns per unit of risk. Tamburi Investment Partners is currently generating about -0.19 per unit of risk. If you would invest 4,484 in General Motors on August 29, 2024 and sell it today you would earn a total of 995.00 from holding General Motors or generate 22.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Tamburi Investment Partners
Performance |
| Timeline |
| General Motors |
| Tamburi Investment |
GM and Tamburi Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Tamburi Investment
The main advantage of trading using opposite GM and Tamburi Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Tamburi Investment 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 Tamburi Investment will offset losses from the drop in Tamburi Investment's long position.The idea behind General Motors and Tamburi Investment Partners pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Tamburi Investment vs. Lendinvest PLC | Tamburi Investment vs. Neometals | Tamburi Investment vs. Coor Service Management | Tamburi Investment vs. Albion Technology General |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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