Correlation Between GM and GRUPO ECOENER
Can any of the company-specific risk be diversified away by investing in both GM and GRUPO ECOENER 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 GRUPO ECOENER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and GRUPO ECOENER EO, you can compare the effects of market volatilities on GM and GRUPO ECOENER 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 GRUPO ECOENER. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and GRUPO ECOENER.
Diversification Opportunities for GM and GRUPO ECOENER
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between GM and GRUPO is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and GRUPO ECOENER EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRUPO ECOENER EO 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 GRUPO ECOENER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRUPO ECOENER EO has no effect on the direction of GM i.e., GM and GRUPO ECOENER go up and down completely randomly.
Pair Corralation between GM and GRUPO ECOENER
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.77 times more return on investment than GRUPO ECOENER. However, General Motors is 1.3 times less risky than GRUPO ECOENER. It trades about 0.04 of its potential returns per unit of risk. GRUPO ECOENER EO is currently generating about 0.01 per unit of risk. If you would invest 3,568 in General Motors on October 13, 2024 and sell it today you would earn a total of 1,417 from holding General Motors or generate 39.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.61% |
| Values | Daily Returns |
General Motors vs. GRUPO ECOENER EO
Performance |
| Timeline |
| General Motors |
| GRUPO ECOENER EO |
GM and GRUPO ECOENER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and GRUPO ECOENER
The main advantage of trading using opposite GM and GRUPO ECOENER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, GRUPO ECOENER 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 GRUPO ECOENER will offset losses from the drop in GRUPO ECOENER's long position.| GM vs. Canoo Inc | GM vs. Aquagold International | GM vs. Morningstar Unconstrained Allocation | GM vs. Thrivent High Yield |
| GRUPO ECOENER vs. Charter Communications | GRUPO ECOENER vs. Daito Trust Construction | GRUPO ECOENER vs. Cairo Communication SpA | GRUPO ECOENER vs. WillScot Mobile Mini |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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