Correlation Between GM and Carson Development
Can any of the company-specific risk be diversified away by investing in both GM and Carson Development 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 Carson Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Carson Development, you can compare the effects of market volatilities on GM and Carson Development 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 Carson Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Carson Development.
Diversification Opportunities for GM and Carson Development
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Carson is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Carson Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carson Development 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 Carson Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carson Development has no effect on the direction of GM i.e., GM and Carson Development go up and down completely randomly.
Pair Corralation between GM and Carson Development
If you would invest 5,096 in General Motors on September 2, 2024 and sell it today you would earn a total of 463.00 from holding General Motors or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
General Motors vs. Carson Development
Performance |
| Timeline |
| General Motors |
| Carson Development |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Carson Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Carson Development
The main advantage of trading using opposite GM and Carson Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Carson Development 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 Carson Development will offset losses from the drop in Carson Development's long position.The idea behind General Motors and Carson Development 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.| Carson Development vs. The Wendys Co | Carson Development vs. AMREP | Carson Development vs. Coursera | Carson Development vs. Ihuman Inc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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