Correlation Between GM and Allan Gray
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By analyzing existing cross correlation between General Motors and Allan Gray , you can compare the effects of market volatilities on GM and Allan Gray 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 Allan Gray. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Allan Gray.
Diversification Opportunities for GM and Allan Gray
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Allan is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Allan Gray in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allan Gray 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 Allan Gray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allan Gray has no effect on the direction of GM i.e., GM and Allan Gray go up and down completely randomly.
Pair Corralation between GM and Allan Gray
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.13 times more return on investment than Allan Gray. However, GM is 2.13 times more volatile than Allan Gray . It trades about 0.05 of its potential returns per unit of risk. Allan Gray is currently generating about 0.09 per unit of risk. If you would invest 3,313 in General Motors on September 13, 2024 and sell it today you would earn a total of 1,917 from holding General Motors or generate 57.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.59% |
| Values | Daily Returns |
General Motors vs. Allan Gray
Performance |
| Timeline |
| General Motors |
| Allan Gray |
GM and Allan Gray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Allan Gray
The main advantage of trading using opposite GM and Allan Gray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Allan Gray 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 Allan Gray will offset losses from the drop in Allan Gray's long position.The idea behind General Motors and Allan Gray 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.| Allan Gray vs. Allan Gray orbis Global | Allan Gray vs. Allan Gray Tax free | Allan Gray vs. 4d Bci Moderate | Allan Gray vs. Coronation Global Optimum |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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