Correlation Between GM and LG DAX
Specify exactly 2 symbols:
By analyzing existing cross correlation between General Motors and LG DAX Daily, you can compare the effects of market volatilities on GM and LG DAX 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 LG DAX. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and LG DAX.
Diversification Opportunities for GM and LG DAX
Very good diversification
The 3 months correlation between GM and DES2 is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and LG DAX Daily in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG DAX Daily 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 LG DAX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG DAX Daily has no effect on the direction of GM i.e., GM and LG DAX go up and down completely randomly.
Pair Corralation between GM and LG DAX
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.45 times more return on investment than LG DAX. However, GM is 1.45 times more volatile than LG DAX Daily. It trades about 0.12 of its potential returns per unit of risk. LG DAX Daily is currently generating about -0.06 per unit of risk. If you would invest 5,197 in General Motors on August 31, 2024 and sell it today you would earn a total of 362.00 from holding General Motors or generate 6.97% 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. LG DAX Daily
Performance |
| Timeline |
| General Motors |
| LG DAX Daily |
GM and LG DAX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and LG DAX
The main advantage of trading using opposite GM and LG DAX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, LG DAX 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 LG DAX will offset losses from the drop in LG DAX's long position.The idea behind General Motors and LG DAX Daily 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.| LG DAX vs. LG DAX Daily | LG DAX vs. iShares Govt Bond | LG DAX vs. Amundi MSCI Europe | LG DAX vs. iShares Global AAA AA |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |