Correlation Between GM and Blackrock High
Can any of the company-specific risk be diversified away by investing in both GM and Blackrock High 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 Blackrock High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Blackrock High Equity, you can compare the effects of market volatilities on GM and Blackrock High 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 Blackrock High. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Blackrock High.
Diversification Opportunities for GM and Blackrock High
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and Blackrock is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Blackrock High Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock High Equity 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 Blackrock High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock High Equity has no effect on the direction of GM i.e., GM and Blackrock High go up and down completely randomly.
Pair Corralation between GM and Blackrock High
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Blackrock High. In addition to that, GM is 4.2 times more volatile than Blackrock High Equity. It trades about -0.01 of its total potential returns per unit of risk. Blackrock High Equity is currently generating about 0.04 per unit of volatility. If you would invest 2,400 in Blackrock High Equity on December 1, 2024 and sell it today you would earn a total of 9.00 from holding Blackrock High Equity or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Blackrock High Equity
Performance |
| Timeline |
| General Motors |
| Blackrock High Equity |
GM and Blackrock High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Blackrock High
The main advantage of trading using opposite GM and Blackrock High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Blackrock High 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 Blackrock High will offset losses from the drop in Blackrock High's long position.The idea behind General Motors and Blackrock High Equity 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.| Blackrock High vs. Adams Natural Resources | Blackrock High vs. Oil Gas Ultrasector | Blackrock High vs. Clearbridge Energy Mlp | Blackrock High vs. Fidelity Advisor Energy |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |