Correlation Between GM and Conwest Assoc
Can any of the company-specific risk be diversified away by investing in both GM and Conwest Assoc 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 Conwest Assoc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Conwest Assoc Part, you can compare the effects of market volatilities on GM and Conwest Assoc 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 Conwest Assoc. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Conwest Assoc.
Diversification Opportunities for GM and Conwest Assoc
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GM and Conwest is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Conwest Assoc Part in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conwest Assoc Part 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 Conwest Assoc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conwest Assoc Part has no effect on the direction of GM i.e., GM and Conwest Assoc go up and down completely randomly.
Pair Corralation between GM and Conwest Assoc
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.85 times more return on investment than Conwest Assoc. However, GM is 1.85 times more volatile than Conwest Assoc Part. It trades about 0.08 of its potential returns per unit of risk. Conwest Assoc Part is currently generating about 0.01 per unit of risk. If you would invest 4,935 in General Motors on August 29, 2024 and sell it today you would earn a total of 615.00 from holding General Motors or generate 12.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.31% |
| Values | Daily Returns |
General Motors vs. Conwest Assoc Part
Performance |
| Timeline |
| General Motors |
| Conwest Assoc Part |
GM and Conwest Assoc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Conwest Assoc
The main advantage of trading using opposite GM and Conwest Assoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Conwest Assoc 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 Conwest Assoc will offset losses from the drop in Conwest Assoc's long position.The idea behind General Motors and Conwest Assoc Part 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.| Conwest Assoc vs. ABIVAX Socit Anonyme | Conwest Assoc vs. Pinnacle Sherman Multi Strategy | Conwest Assoc vs. Morningstar Unconstrained Allocation | Conwest Assoc vs. SPACE |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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