Correlation Between GM and Aminex PLC
Can any of the company-specific risk be diversified away by investing in both GM and Aminex PLC 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 Aminex PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Aminex PLC, you can compare the effects of market volatilities on GM and Aminex PLC 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 Aminex PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Aminex PLC.
Diversification Opportunities for GM and Aminex PLC
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and Aminex is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Aminex PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aminex PLC 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 Aminex PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aminex PLC has no effect on the direction of GM i.e., GM and Aminex PLC go up and down completely randomly.
Pair Corralation between GM and Aminex PLC
If you would invest 5,272 in General Motors on August 25, 2024 and sell it today you would earn a total of 581.00 from holding General Motors or generate 11.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Aminex PLC
Performance |
| Timeline |
| General Motors |
| Aminex PLC |
GM and Aminex PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Aminex PLC
The main advantage of trading using opposite GM and Aminex PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Aminex PLC 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 Aminex PLC will offset losses from the drop in Aminex PLC's long position.The idea behind General Motors and Aminex 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.| Aminex PLC vs. Petrus Resources | Aminex PLC vs. Valeura Energy | Aminex PLC vs. Epsilon Energy | Aminex PLC vs. Questerre Energy |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |