Correlation Between GM and Coursera
Can any of the company-specific risk be diversified away by investing in both GM and Coursera 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 Coursera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Coursera, you can compare the effects of market volatilities on GM and Coursera 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 Coursera. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Coursera.
Diversification Opportunities for GM and Coursera
Very good diversification
The 3 months correlation between GM and Coursera is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Coursera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coursera 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 Coursera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coursera has no effect on the direction of GM i.e., GM and Coursera go up and down completely randomly.
Pair Corralation between GM and Coursera
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.57 times more return on investment than Coursera. However, General Motors is 1.74 times less risky than Coursera. It trades about 0.03 of its potential returns per unit of risk. Coursera is currently generating about -0.01 per unit of risk. If you would invest 4,028 in General Motors on November 9, 2024 and sell it today you would earn a total of 765.00 from holding General Motors or generate 18.99% 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. Coursera
Performance |
| Timeline |
| General Motors |
| Coursera |
GM and Coursera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Coursera
The main advantage of trading using opposite GM and Coursera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Coursera 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 Coursera will offset losses from the drop in Coursera's long position.The idea behind General Motors and Coursera 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.| Coursera vs. Chegg Inc | Coursera vs. Skillsoft Corp | Coursera vs. Laureate Education | Coursera vs. Udemy 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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