Correlation Between GM and BRITVIC
Can any of the company-specific risk be diversified away by investing in both GM and BRITVIC 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 BRITVIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and BRITVIC, you can compare the effects of market volatilities on GM and BRITVIC 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 BRITVIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and BRITVIC.
Diversification Opportunities for GM and BRITVIC
Pay attention - limited upside
The 3 months correlation between GM and BRITVIC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and BRITVIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRITVIC 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 BRITVIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRITVIC has no effect on the direction of GM i.e., GM and BRITVIC go up and down completely randomly.
Pair Corralation between GM and BRITVIC
If you would invest 3,263 in General Motors on September 14, 2024 and sell it today you would earn a total of 1,997 from holding General Motors or generate 61.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
General Motors vs. BRITVIC
Performance |
| Timeline |
| General Motors |
| BRITVIC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and BRITVIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and BRITVIC
The main advantage of trading using opposite GM and BRITVIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, BRITVIC 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 BRITVIC will offset losses from the drop in BRITVIC's long position.The idea behind General Motors and BRITVIC 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.| BRITVIC vs. VIRGIN WINES UK | BRITVIC vs. Treasury Wine Estates | BRITVIC vs. Charter Communications | BRITVIC vs. Webster Financial |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |