Correlation Between GM and Axion Power
Can any of the company-specific risk be diversified away by investing in both GM and Axion Power 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 Axion Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Axion Power International, you can compare the effects of market volatilities on GM and Axion Power 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 Axion Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Axion Power.
Diversification Opportunities for GM and Axion Power
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Axion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Axion Power International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axion Power International 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 Axion Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axion Power International has no effect on the direction of GM i.e., GM and Axion Power go up and down completely randomly.
Pair Corralation between GM and Axion Power
If you would invest 3,889 in General Motors on August 28, 2024 and sell it today you would earn a total of 2,131 from holding General Motors or generate 54.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.28% |
| Values | Daily Returns |
General Motors vs. Axion Power International
Performance |
| Timeline |
| General Motors |
| Axion Power International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Axion Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Axion Power
The main advantage of trading using opposite GM and Axion Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Axion Power 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 Axion Power will offset losses from the drop in Axion Power's long position.The idea behind General Motors and Axion Power International 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.| Axion Power vs. AFC Energy plc | Axion Power vs. ADS TEC ENERGY PLC | Axion Power vs. ABB | Axion Power vs. Ads Tec Energy |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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