Correlation Between GM and Airship AI
Can any of the company-specific risk be diversified away by investing in both GM and Airship AI 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 Airship AI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Airship AI Holdings, you can compare the effects of market volatilities on GM and Airship AI 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 Airship AI. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Airship AI.
Diversification Opportunities for GM and Airship AI
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Airship is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Airship AI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airship AI Holdings 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 Airship AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airship AI Holdings has no effect on the direction of GM i.e., GM and Airship AI go up and down completely randomly.
Pair Corralation between GM and Airship AI
Allowing for the 90-day total investment horizon GM is expected to generate 2.81 times less return on investment than Airship AI. But when comparing it to its historical volatility, General Motors is 5.97 times less risky than Airship AI. It trades about 0.08 of its potential returns per unit of risk. Airship AI Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 76.00 in Airship AI Holdings on September 3, 2024 and sell it today you would lose (28.00) from holding Airship AI Holdings or give up 36.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Airship AI Holdings
Performance |
| Timeline |
| General Motors |
| Airship AI Holdings |
GM and Airship AI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Airship AI
The main advantage of trading using opposite GM and Airship AI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Airship AI 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 Airship AI will offset losses from the drop in Airship AI's long position.The idea behind General Motors and Airship AI Holdings 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.| Airship AI vs. Rapid7 Inc | Airship AI vs. CyberArk Software | Airship AI vs. Check Point Software | Airship AI vs. Tenable Holdings |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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