Correlation Between GM and Amprius Technologies
Can any of the company-specific risk be diversified away by investing in both GM and Amprius Technologies 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 Amprius Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Amprius Technologies, you can compare the effects of market volatilities on GM and Amprius Technologies 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 Amprius Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Amprius Technologies.
Diversification Opportunities for GM and Amprius Technologies
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GM and Amprius is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Amprius Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amprius Technologies 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 Amprius Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amprius Technologies has no effect on the direction of GM i.e., GM and Amprius Technologies go up and down completely randomly.
Pair Corralation between GM and Amprius Technologies
Allowing for the 90-day total investment horizon GM is expected to generate 1.47 times less return on investment than Amprius Technologies. But when comparing it to its historical volatility, General Motors is 3.76 times less risky than Amprius Technologies. It trades about 0.06 of its potential returns per unit of risk. Amprius Technologies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 430.00 in Amprius Technologies on November 4, 2024 and sell it today you would lose (97.00) from holding Amprius Technologies or give up 22.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Amprius Technologies
Performance |
| Timeline |
| General Motors |
| Amprius Technologies |
GM and Amprius Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Amprius Technologies
The main advantage of trading using opposite GM and Amprius Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Amprius Technologies 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 Amprius Technologies will offset losses from the drop in Amprius Technologies' long position.The idea behind General Motors and Amprius Technologies 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.| Amprius Technologies vs. Eos Energy Enterprises | Amprius Technologies vs. FREYR Battery SA | Amprius Technologies vs. Microvast Holdings | Amprius Technologies vs. Chardan NexTech Acquisition |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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