Correlation Between GM and BA69
Can any of the company-specific risk be diversified away by investing in both GM and BA69 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 BA69 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and BA69, you can compare the effects of market volatilities on GM and BA69 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 BA69. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and BA69.
Diversification Opportunities for GM and BA69
Pay attention - limited upside
The 3 months correlation between GM and BA69 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and BA69 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BA69 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 BA69. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BA69 has no effect on the direction of GM i.e., GM and BA69 go up and down completely randomly.
Pair Corralation between GM and BA69
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 | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
General Motors vs. BA69
Performance |
| Timeline |
| General Motors |
| BA69 |
GM and BA69 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and BA69
The main advantage of trading using opposite GM and BA69 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, BA69 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 BA69 will offset losses from the drop in BA69's long position.The idea behind General Motors and BA69 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.| BA69 vs. Cairo Communication SpA | BA69 vs. Spirent Communications plc | BA69 vs. DXC Technology Co | BA69 vs. Take Two Interactive Software |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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