Correlation Between GM and Bayview Acquisition
Can any of the company-specific risk be diversified away by investing in both GM and Bayview Acquisition 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 Bayview Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Bayview Acquisition Corp, you can compare the effects of market volatilities on GM and Bayview Acquisition 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 Bayview Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Bayview Acquisition.
Diversification Opportunities for GM and Bayview Acquisition
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GM and Bayview is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Bayview Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayview Acquisition Corp 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 Bayview Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayview Acquisition Corp has no effect on the direction of GM i.e., GM and Bayview Acquisition go up and down completely randomly.
Pair Corralation between GM and Bayview Acquisition
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.02 times more return on investment than Bayview Acquisition. However, GM is 2.02 times more volatile than Bayview Acquisition Corp. It trades about 0.05 of its potential returns per unit of risk. Bayview Acquisition Corp is currently generating about 0.04 per unit of risk. If you would invest 3,807 in General Motors on August 26, 2024 and sell it today you would earn a total of 2,046 from holding General Motors or generate 53.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 48.09% |
| Values | Daily Returns |
General Motors vs. Bayview Acquisition Corp
Performance |
| Timeline |
| General Motors |
| Bayview Acquisition Corp |
GM and Bayview Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Bayview Acquisition
The main advantage of trading using opposite GM and Bayview Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Bayview Acquisition 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 Bayview Acquisition will offset losses from the drop in Bayview Acquisition's long position.The idea behind General Motors and Bayview Acquisition Corp 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.| Bayview Acquisition vs. Voyager Acquisition Corp | Bayview Acquisition vs. YHN Acquisition I | Bayview Acquisition vs. Vine Hill Capital | Bayview Acquisition vs. DP Cap Acquisition |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Positions Ratings 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 | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |