Correlation Between GM and CUSTODIAN INVESTMENT
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By analyzing existing cross correlation between General Motors and CUSTODIAN INVESTMENT PLC, you can compare the effects of market volatilities on GM and CUSTODIAN INVESTMENT 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 CUSTODIAN INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and CUSTODIAN INVESTMENT.
Diversification Opportunities for GM and CUSTODIAN INVESTMENT
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GM and CUSTODIAN is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and CUSTODIAN INVESTMENT PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CUSTODIAN INVESTMENT PLC 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 CUSTODIAN INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CUSTODIAN INVESTMENT PLC has no effect on the direction of GM i.e., GM and CUSTODIAN INVESTMENT go up and down completely randomly.
Pair Corralation between GM and CUSTODIAN INVESTMENT
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.1 times more return on investment than CUSTODIAN INVESTMENT. However, GM is 1.1 times more volatile than CUSTODIAN INVESTMENT PLC. It trades about 0.16 of its potential returns per unit of risk. CUSTODIAN INVESTMENT PLC is currently generating about 0.15 per unit of risk. 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 | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
General Motors vs. CUSTODIAN INVESTMENT PLC
Performance |
| Timeline |
| General Motors |
| CUSTODIAN INVESTMENT PLC |
GM and CUSTODIAN INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and CUSTODIAN INVESTMENT
The main advantage of trading using opposite GM and CUSTODIAN INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, CUSTODIAN INVESTMENT 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 CUSTODIAN INVESTMENT will offset losses from the drop in CUSTODIAN INVESTMENT's long position.The idea behind General Motors and CUSTODIAN INVESTMENT PLC 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.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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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