Correlation Between GM and Allianzgi Short
Can any of the company-specific risk be diversified away by investing in both GM and Allianzgi Short 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 Allianzgi Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Allianzgi Short Duration, you can compare the effects of market volatilities on GM and Allianzgi Short 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 Allianzgi Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Allianzgi Short.
Diversification Opportunities for GM and Allianzgi Short
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and Allianzgi is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Allianzgi Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Short Duration 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 Allianzgi Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Short Duration has no effect on the direction of GM i.e., GM and Allianzgi Short go up and down completely randomly.
Pair Corralation between GM and Allianzgi Short
Allowing for the 90-day total investment horizon General Motors is expected to generate 16.37 times more return on investment than Allianzgi Short. However, GM is 16.37 times more volatile than Allianzgi Short Duration. It trades about 0.16 of its potential returns per unit of risk. Allianzgi Short Duration is currently generating about 0.1 per unit of risk. If you would invest 5,096 in General Motors on September 2, 2024 and sell it today you would earn a total of 463.00 from holding General Motors or generate 9.09% 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. Allianzgi Short Duration
Performance |
| Timeline |
| General Motors |
| Allianzgi Short Duration |
GM and Allianzgi Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Allianzgi Short
The main advantage of trading using opposite GM and Allianzgi Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Allianzgi Short 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 Allianzgi Short will offset losses from the drop in Allianzgi Short's long position.The idea behind General Motors and Allianzgi Short Duration 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.| Allianzgi Short vs. Allianzgi Nfj International | Allianzgi Short vs. Allianzgi Vertible Fund | Allianzgi Short vs. Allianzgi Nfj Mid Cap | Allianzgi Short vs. Allianzgi Focused Growth |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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