Correlation Between GM and Altshuler Shaham
Can any of the company-specific risk be diversified away by investing in both GM and Altshuler Shaham 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 Altshuler Shaham into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Altshuler Shaham Financial, you can compare the effects of market volatilities on GM and Altshuler Shaham 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 Altshuler Shaham. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Altshuler Shaham.
Diversification Opportunities for GM and Altshuler Shaham
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GM and Altshuler is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Altshuler Shaham Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altshuler Shaham Fin 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 Altshuler Shaham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altshuler Shaham Fin has no effect on the direction of GM i.e., GM and Altshuler Shaham go up and down completely randomly.
Pair Corralation between GM and Altshuler Shaham
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.78 times more return on investment than Altshuler Shaham. However, GM is 1.78 times more volatile than Altshuler Shaham Financial. It trades about -0.16 of its potential returns per unit of risk. Altshuler Shaham Financial is currently generating about -0.44 per unit of risk. If you would invest 5,612 in General Motors on September 18, 2024 and sell it today you would lose (497.00) from holding General Motors or give up 8.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 85.71% |
| Values | Daily Returns |
General Motors vs. Altshuler Shaham Financial
Performance |
| Timeline |
| General Motors |
| Altshuler Shaham Fin |
GM and Altshuler Shaham Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Altshuler Shaham
The main advantage of trading using opposite GM and Altshuler Shaham positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Altshuler Shaham 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 Altshuler Shaham will offset losses from the drop in Altshuler Shaham's long position.The idea behind General Motors and Altshuler Shaham Financial 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.| Altshuler Shaham vs. Meitav Dash Investments | Altshuler Shaham vs. Mivtach Shamir | Altshuler Shaham vs. YD More Investments | Altshuler Shaham vs. Analyst IMS Investment |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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