Correlation Between GM and Taxus Cardium
Can any of the company-specific risk be diversified away by investing in both GM and Taxus Cardium 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 Taxus Cardium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Taxus Cardium Pharmaceuticals, you can compare the effects of market volatilities on GM and Taxus Cardium 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 Taxus Cardium. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Taxus Cardium.
Diversification Opportunities for GM and Taxus Cardium
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Taxus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Taxus Cardium Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taxus Cardium Pharma 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 Taxus Cardium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taxus Cardium Pharma has no effect on the direction of GM i.e., GM and Taxus Cardium go up and down completely randomly.
Pair Corralation between GM and Taxus Cardium
If you would invest 3,888 in General Motors on October 7, 2024 and sell it today you would earn a total of 1,289 from holding General Motors or generate 33.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.44% |
| Values | Daily Returns |
General Motors vs. Taxus Cardium Pharmaceuticals
Performance |
| Timeline |
| General Motors |
| Taxus Cardium Pharma |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Taxus Cardium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Taxus Cardium
The main advantage of trading using opposite GM and Taxus Cardium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Taxus Cardium 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 Taxus Cardium will offset losses from the drop in Taxus Cardium's long position.The idea behind General Motors and Taxus Cardium Pharmaceuticals 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.| Taxus Cardium vs. Revolution Medicines | Taxus Cardium vs. Blueprint Medicines Corp | Taxus Cardium vs. Sana Biotechnology | Taxus Cardium vs. Kymera Therapeutics |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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