Correlation Between GM and ASA METROPOLIS
Can any of the company-specific risk be diversified away by investing in both GM and ASA METROPOLIS 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 ASA METROPOLIS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and ASA METROPOLIS FUNDO, you can compare the effects of market volatilities on GM and ASA METROPOLIS 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 ASA METROPOLIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and ASA METROPOLIS.
Diversification Opportunities for GM and ASA METROPOLIS
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GM and ASA is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and ASA METROPOLIS FUNDO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASA METROPOLIS FUNDO 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 ASA METROPOLIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASA METROPOLIS FUNDO has no effect on the direction of GM i.e., GM and ASA METROPOLIS go up and down completely randomly.
Pair Corralation between GM and ASA METROPOLIS
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.84 times more return on investment than ASA METROPOLIS. However, General Motors is 1.19 times less risky than ASA METROPOLIS. It trades about 0.31 of its potential returns per unit of risk. ASA METROPOLIS FUNDO is currently generating about -0.11 per unit of risk. If you would invest 5,273 in General Motors on August 28, 2024 and sell it today you would earn a total of 747.00 from holding General Motors or generate 14.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
General Motors vs. ASA METROPOLIS FUNDO
Performance |
| Timeline |
| General Motors |
| ASA METROPOLIS FUNDO |
GM and ASA METROPOLIS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and ASA METROPOLIS
The main advantage of trading using opposite GM and ASA METROPOLIS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, ASA METROPOLIS 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 ASA METROPOLIS will offset losses from the drop in ASA METROPOLIS's long position.The idea behind General Motors and ASA METROPOLIS FUNDO 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.| ASA METROPOLIS vs. BTG Pactual Logstica | ASA METROPOLIS vs. Fundo Investimento Imobiliario | ASA METROPOLIS vs. KILIMA VOLKANO RECEBVEIS | ASA METROPOLIS vs. Santander Renda De |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |