Correlation Between GM and Energenesis Biomedical
Can any of the company-specific risk be diversified away by investing in both GM and Energenesis Biomedical 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 Energenesis Biomedical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Energenesis Biomedical Co, you can compare the effects of market volatilities on GM and Energenesis Biomedical 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 Energenesis Biomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Energenesis Biomedical.
Diversification Opportunities for GM and Energenesis Biomedical
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and Energenesis is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Energenesis Biomedical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energenesis Biomedical 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 Energenesis Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energenesis Biomedical has no effect on the direction of GM i.e., GM and Energenesis Biomedical go up and down completely randomly.
Pair Corralation between GM and Energenesis Biomedical
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Energenesis Biomedical. But the stock apears to be less risky and, when comparing its historical volatility, General Motors is 1.52 times less risky than Energenesis Biomedical. The stock trades about -0.08 of its potential returns per unit of risk. The Energenesis Biomedical Co is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 5,150 in Energenesis Biomedical Co on November 30, 2024 and sell it today you would earn a total of 1,830 from holding Energenesis Biomedical Co or generate 35.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.24% |
| Values | Daily Returns |
General Motors vs. Energenesis Biomedical Co
Performance |
| Timeline |
| General Motors |
| Energenesis Biomedical |
GM and Energenesis Biomedical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Energenesis Biomedical
The main advantage of trading using opposite GM and Energenesis Biomedical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Energenesis Biomedical 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 Energenesis Biomedical will offset losses from the drop in Energenesis Biomedical's long position.The idea behind General Motors and Energenesis Biomedical Co 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.| Energenesis Biomedical vs. Chi Sheng Chemical | Energenesis Biomedical vs. Formosan Union Chemical | Energenesis Biomedical vs. Apacer Technology | Energenesis Biomedical vs. Silicon Power Computer |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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