Correlation Between GM and Doubleline Low
Can any of the company-specific risk be diversified away by investing in both GM and Doubleline Low 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 Doubleline Low into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Doubleline Low Duration, you can compare the effects of market volatilities on GM and Doubleline Low 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 Doubleline Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Doubleline Low.
Diversification Opportunities for GM and Doubleline Low
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and Doubleline is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Doubleline Low Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubleline Low Duration 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 Doubleline Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doubleline Low Duration has no effect on the direction of GM i.e., GM and Doubleline Low go up and down completely randomly.
Pair Corralation between GM and Doubleline Low
Allowing for the 90-day total investment horizon General Motors is expected to generate 27.18 times more return on investment than Doubleline Low. However, GM is 27.18 times more volatile than Doubleline Low Duration. It trades about 0.08 of its potential returns per unit of risk. Doubleline Low Duration is currently generating about 0.24 per unit of risk. If you would invest 4,551 in General Motors on September 1, 2024 and sell it today you would earn a total of 1,008 from holding General Motors or generate 22.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
General Motors vs. Doubleline Low Duration
Performance |
| Timeline |
| General Motors |
| Doubleline Low Duration |
GM and Doubleline Low Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Doubleline Low
The main advantage of trading using opposite GM and Doubleline Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Doubleline Low 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 Doubleline Low will offset losses from the drop in Doubleline Low's long position.The idea behind General Motors and Doubleline Low Duration 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.| Doubleline Low vs. The Gabelli Equity | Doubleline Low vs. Us Vector Equity | Doubleline Low vs. Balanced Fund Retail | Doubleline Low vs. Scharf Fund Retail |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |