Correlation Between GM and Spartan Delta
Can any of the company-specific risk be diversified away by investing in both GM and Spartan Delta 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 Spartan Delta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Spartan Delta Corp, you can compare the effects of market volatilities on GM and Spartan Delta 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 Spartan Delta. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Spartan Delta.
Diversification Opportunities for GM and Spartan Delta
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GM and Spartan is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Spartan Delta Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spartan Delta Corp 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 Spartan Delta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spartan Delta Corp has no effect on the direction of GM i.e., GM and Spartan Delta go up and down completely randomly.
Pair Corralation between GM and Spartan Delta
Allowing for the 90-day total investment horizon GM is expected to generate 7.01 times less return on investment than Spartan Delta. But when comparing it to its historical volatility, General Motors is 1.19 times less risky than Spartan Delta. It trades about 0.07 of its potential returns per unit of risk. Spartan Delta Corp is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 222.00 in Spartan Delta Corp on October 23, 2024 and sell it today you would earn a total of 49.00 from holding Spartan Delta Corp or generate 22.07% 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. Spartan Delta Corp
Performance |
| Timeline |
| General Motors |
| Spartan Delta Corp |
GM and Spartan Delta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Spartan Delta
The main advantage of trading using opposite GM and Spartan Delta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Spartan Delta 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 Spartan Delta will offset losses from the drop in Spartan Delta's long position.The idea behind General Motors and Spartan Delta Corp 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.| Spartan Delta vs. Tamarack Valley Energy | Spartan Delta vs. Headwater Exploration | Spartan Delta vs. Cardinal Energy | Spartan Delta vs. Kelt Exploration |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |