Correlation Between GM and Blockchain Coinvestors
Can any of the company-specific risk be diversified away by investing in both GM and Blockchain Coinvestors 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 Blockchain Coinvestors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Blockchain Coinvestors Acquisition, you can compare the effects of market volatilities on GM and Blockchain Coinvestors 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 Blockchain Coinvestors. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Blockchain Coinvestors.
Diversification Opportunities for GM and Blockchain Coinvestors
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Blockchain is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Blockchain Coinvestors Acquisi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blockchain Coinvestors 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 Blockchain Coinvestors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blockchain Coinvestors has no effect on the direction of GM i.e., GM and Blockchain Coinvestors go up and down completely randomly.
Pair Corralation between GM and Blockchain Coinvestors
Allowing for the 90-day total investment horizon GM is expected to generate 14.05 times less return on investment than Blockchain Coinvestors. But when comparing it to its historical volatility, General Motors is 21.04 times less risky than Blockchain Coinvestors. It trades about 0.13 of its potential returns per unit of risk. Blockchain Coinvestors Acquisition is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1.11 in Blockchain Coinvestors Acquisition on August 30, 2024 and sell it today you would lose (1.02) from holding Blockchain Coinvestors Acquisition or give up 91.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 54.55% |
| Values | Daily Returns |
General Motors vs. Blockchain Coinvestors Acquisi
Performance |
| Timeline |
| General Motors |
| Blockchain Coinvestors |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
GM and Blockchain Coinvestors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Blockchain Coinvestors
The main advantage of trading using opposite GM and Blockchain Coinvestors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Blockchain Coinvestors 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 Blockchain Coinvestors will offset losses from the drop in Blockchain Coinvestors' long position.The idea behind General Motors and Blockchain Coinvestors Acquisition 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.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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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