Correlation Between GM and Victory Cemp
Can any of the company-specific risk be diversified away by investing in both GM and Victory Cemp 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 Victory Cemp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Victory Cemp Market, you can compare the effects of market volatilities on GM and Victory Cemp 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 Victory Cemp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Victory Cemp.
Diversification Opportunities for GM and Victory Cemp
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and Victory is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Victory Cemp Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Cemp Market 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 Victory Cemp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Cemp Market has no effect on the direction of GM i.e., GM and Victory Cemp go up and down completely randomly.
Pair Corralation between GM and Victory Cemp
Allowing for the 90-day total investment horizon General Motors is expected to generate 14.99 times more return on investment than Victory Cemp. However, GM is 14.99 times more volatile than Victory Cemp Market. It trades about 0.07 of its potential returns per unit of risk. Victory Cemp Market is currently generating about -0.05 per unit of risk. If you would invest 5,273 in General Motors on August 29, 2024 and sell it today you would earn a total of 206.00 from holding General Motors or generate 3.91% 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. Victory Cemp Market
Performance |
| Timeline |
| General Motors |
| Victory Cemp Market |
GM and Victory Cemp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Victory Cemp
The main advantage of trading using opposite GM and Victory Cemp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Victory Cemp 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 Victory Cemp will offset losses from the drop in Victory Cemp's long position.The idea behind General Motors and Victory Cemp Market 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.| Victory Cemp vs. Pimco Trends Managed | Victory Cemp vs. Asg Managed Futures | Victory Cemp vs. Otter Creek Longshort | Victory Cemp vs. Boston Partners Global |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |