Correlation Between GM and Beacon Rise
Can any of the company-specific risk be diversified away by investing in both GM and Beacon Rise 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 Beacon Rise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Beacon Rise Holdings, you can compare the effects of market volatilities on GM and Beacon Rise 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 Beacon Rise. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Beacon Rise.
Diversification Opportunities for GM and Beacon Rise
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Beacon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Beacon Rise Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beacon Rise Holdings 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 Beacon Rise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beacon Rise Holdings has no effect on the direction of GM i.e., GM and Beacon Rise go up and down completely randomly.
Pair Corralation between GM and Beacon Rise
If you would invest 4,829 in General Motors on August 31, 2024 and sell it today you would earn a total of 721.00 from holding General Motors or generate 14.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
General Motors vs. Beacon Rise Holdings
Performance |
| Timeline |
| General Motors |
| Beacon Rise Holdings |
GM and Beacon Rise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Beacon Rise
The main advantage of trading using opposite GM and Beacon Rise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Beacon Rise 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 Beacon Rise will offset losses from the drop in Beacon Rise's long position.The idea behind General Motors and Beacon Rise Holdings 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.| Beacon Rise vs. Sunny Optical Technology | Beacon Rise vs. Orient Telecoms | Beacon Rise vs. Spirent Communications plc | Beacon Rise vs. PureTech Health plc |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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