Correlation Between GM and MARUHA NICHIRO
Can any of the company-specific risk be diversified away by investing in both GM and MARUHA NICHIRO 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 MARUHA NICHIRO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and MARUHA NICHIRO, you can compare the effects of market volatilities on GM and MARUHA NICHIRO 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 MARUHA NICHIRO. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and MARUHA NICHIRO.
Diversification Opportunities for GM and MARUHA NICHIRO
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and MARUHA is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and MARUHA NICHIRO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARUHA NICHIRO 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 MARUHA NICHIRO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARUHA NICHIRO has no effect on the direction of GM i.e., GM and MARUHA NICHIRO go up and down completely randomly.
Pair Corralation between GM and MARUHA NICHIRO
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.86 times more return on investment than MARUHA NICHIRO. However, GM is 1.86 times more volatile than MARUHA NICHIRO. It trades about 0.13 of its potential returns per unit of risk. MARUHA NICHIRO is currently generating about 0.11 per unit of risk. If you would invest 5,154 in General Motors on August 30, 2024 and sell it today you would earn a total of 396.00 from holding General Motors or generate 7.68% 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. MARUHA NICHIRO
Performance |
| Timeline |
| General Motors |
| MARUHA NICHIRO |
GM and MARUHA NICHIRO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and MARUHA NICHIRO
The main advantage of trading using opposite GM and MARUHA NICHIRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, MARUHA NICHIRO 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 MARUHA NICHIRO will offset losses from the drop in MARUHA NICHIRO's long position.The idea behind General Motors and MARUHA NICHIRO 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.| MARUHA NICHIRO vs. National Retail Properties | MARUHA NICHIRO vs. AUTO TRADER ADR | MARUHA NICHIRO vs. Salesforce | MARUHA NICHIRO vs. NISSAN CHEMICAL IND |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |