Correlation Between GM and Brunello Cucinelli
Can any of the company-specific risk be diversified away by investing in both GM and Brunello Cucinelli 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 Brunello Cucinelli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Brunello Cucinelli SpA, you can compare the effects of market volatilities on GM and Brunello Cucinelli 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 Brunello Cucinelli. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Brunello Cucinelli.
Diversification Opportunities for GM and Brunello Cucinelli
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GM and Brunello is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Brunello Cucinelli SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunello Cucinelli SpA 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 Brunello Cucinelli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunello Cucinelli SpA has no effect on the direction of GM i.e., GM and Brunello Cucinelli go up and down completely randomly.
Pair Corralation between GM and Brunello Cucinelli
Allowing for the 90-day total investment horizon General Motors is expected to generate 3.1 times more return on investment than Brunello Cucinelli. However, GM is 3.1 times more volatile than Brunello Cucinelli SpA. It trades about 0.08 of its potential returns per unit of risk. Brunello Cucinelli SpA is currently generating about -0.06 per unit of risk. If you would invest 4,551 in General Motors on August 30, 2024 and sell it today you would earn a total of 999.00 from holding General Motors or generate 21.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Brunello Cucinelli SpA
Performance |
| Timeline |
| General Motors |
| Brunello Cucinelli SpA |
GM and Brunello Cucinelli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Brunello Cucinelli
The main advantage of trading using opposite GM and Brunello Cucinelli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Brunello Cucinelli 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 Brunello Cucinelli will offset losses from the drop in Brunello Cucinelli's long position.The idea behind General Motors and Brunello Cucinelli SpA 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.| Brunello Cucinelli vs. Apple Inc | Brunello Cucinelli vs. Microsoft | Brunello Cucinelli vs. Alphabet Inc Class C | Brunello Cucinelli vs. Meta Platforms |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |