Correlation Between GM and Catalyst Exceed
Can any of the company-specific risk be diversified away by investing in both GM and Catalyst Exceed 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 Catalyst Exceed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Catalyst Exceed Defined, you can compare the effects of market volatilities on GM and Catalyst Exceed 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 Catalyst Exceed. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Catalyst Exceed.
Diversification Opportunities for GM and Catalyst Exceed
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Catalyst is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Catalyst Exceed Defined in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Exceed Defined 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 Catalyst Exceed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Exceed Defined has no effect on the direction of GM i.e., GM and Catalyst Exceed go up and down completely randomly.
Pair Corralation between GM and Catalyst Exceed
Allowing for the 90-day total investment horizon General Motors is expected to generate 3.64 times more return on investment than Catalyst Exceed. However, GM is 3.64 times more volatile than Catalyst Exceed Defined. It trades about 0.17 of its potential returns per unit of risk. Catalyst Exceed Defined is currently generating about 0.16 per unit of risk. If you would invest 5,076 in General Motors on September 1, 2024 and sell it today you would earn a total of 483.00 from holding General Motors or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
General Motors vs. Catalyst Exceed Defined
Performance |
| Timeline |
| General Motors |
| Catalyst Exceed Defined |
GM and Catalyst Exceed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Catalyst Exceed
The main advantage of trading using opposite GM and Catalyst Exceed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Catalyst Exceed 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 Catalyst Exceed will offset losses from the drop in Catalyst Exceed's long position.The idea behind General Motors and Catalyst Exceed Defined 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.| Catalyst Exceed vs. Catalystsmh High Income | Catalyst Exceed vs. Catalystsmh High Income | Catalyst Exceed vs. Catalystsmh High Income | Catalyst Exceed vs. Catalyst Mlp Infrastructure |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |