Correlation Between GM and Bonava AB
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By analyzing existing cross correlation between General Motors and Bonava AB, you can compare the effects of market volatilities on GM and Bonava AB 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 Bonava AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Bonava AB.
Diversification Opportunities for GM and Bonava AB
Weak diversification
The 3 months correlation between GM and Bonava is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Bonava AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonava AB 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 Bonava AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonava AB has no effect on the direction of GM i.e., GM and Bonava AB go up and down completely randomly.
Pair Corralation between GM and Bonava AB
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.49 times more return on investment than Bonava AB. However, General Motors is 2.04 times less risky than Bonava AB. It trades about 0.08 of its potential returns per unit of risk. Bonava AB is currently generating about 0.02 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 Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
General Motors vs. Bonava AB
Performance |
| Timeline |
| General Motors |
| Bonava AB |
GM and Bonava AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Bonava AB
The main advantage of trading using opposite GM and Bonava AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Bonava AB 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 Bonava AB will offset losses from the drop in Bonava AB's long position.The idea behind General Motors and Bonava AB 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.| Bonava AB vs. Bonava AB | Bonava AB vs. Atrium Ljungberg AB | Bonava AB vs. Attendo AB | Bonava AB vs. NCC AB |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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