Correlation Between GM and Moneysupermarket
Can any of the company-specific risk be diversified away by investing in both GM and Moneysupermarket 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 Moneysupermarket into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Moneysupermarket Group PLC, you can compare the effects of market volatilities on GM and Moneysupermarket 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 Moneysupermarket. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Moneysupermarket.
Diversification Opportunities for GM and Moneysupermarket
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Moneysupermarket is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Moneysupermarket Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moneysupermarket 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 Moneysupermarket. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moneysupermarket has no effect on the direction of GM i.e., GM and Moneysupermarket go up and down completely randomly.
Pair Corralation between GM and Moneysupermarket
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Moneysupermarket. In addition to that, GM is 1.66 times more volatile than Moneysupermarket Group PLC. It trades about -0.15 of its total potential returns per unit of risk. Moneysupermarket Group PLC is currently generating about 0.16 per unit of volatility. If you would invest 215.00 in Moneysupermarket Group PLC on September 14, 2024 and sell it today you would earn a total of 11.00 from holding Moneysupermarket Group PLC or generate 5.12% 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. Moneysupermarket Group PLC
Performance |
| Timeline |
| General Motors |
| Moneysupermarket |
GM and Moneysupermarket Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Moneysupermarket
The main advantage of trading using opposite GM and Moneysupermarket positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Moneysupermarket 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 Moneysupermarket will offset losses from the drop in Moneysupermarket's long position.The idea behind General Motors and Moneysupermarket Group PLC 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.| Moneysupermarket vs. FUTURE GAMING GRP | Moneysupermarket vs. HOCHSCHILD MINING | Moneysupermarket vs. JIAHUA STORES | Moneysupermarket vs. National Retail Properties |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |