Correlation Between GM and BGT Public
Can any of the company-specific risk be diversified away by investing in both GM and BGT Public 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 BGT Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and BGT Public, you can compare the effects of market volatilities on GM and BGT Public 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 BGT Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and BGT Public.
Diversification Opportunities for GM and BGT Public
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and BGT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and BGT Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGT Public 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 BGT Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGT Public has no effect on the direction of GM i.e., GM and BGT Public go up and down completely randomly.
Pair Corralation between GM and BGT Public
If you would invest 0.00 in BGT Public on January 4, 2025 and sell it today you would earn a total of 0.00 from holding BGT Public or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
General Motors vs. BGT Public
Performance |
| Timeline |
| General Motors |
| BGT Public |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
GM and BGT Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and BGT Public
The main advantage of trading using opposite GM and BGT Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, BGT Public 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 BGT Public will offset losses from the drop in BGT Public's long position.The idea behind General Motors and BGT Public 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.| BGT Public vs. Cho Thavee Public | BGT Public vs. G Capital Public | BGT Public vs. CI Group Public | BGT Public vs. ASIA Capital Group |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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