Correlation Between GM and Dice Molecules
Can any of the company-specific risk be diversified away by investing in both GM and Dice Molecules 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 Dice Molecules into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Dice Molecules Holdings, you can compare the effects of market volatilities on GM and Dice Molecules 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 Dice Molecules. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Dice Molecules.
Diversification Opportunities for GM and Dice Molecules
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GM and Dice is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Dice Molecules Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dice Molecules Holdings 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 Dice Molecules. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dice Molecules Holdings has no effect on the direction of GM i.e., GM and Dice Molecules go up and down completely randomly.
Pair Corralation between GM and Dice Molecules
If you would invest 5,273 in General Motors on August 28, 2024 and sell it today you would earn a total of 747.00 from holding General Motors or generate 14.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
General Motors vs. Dice Molecules Holdings
Performance |
| Timeline |
| General Motors |
| Dice Molecules Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Dice Molecules Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Dice Molecules
The main advantage of trading using opposite GM and Dice Molecules positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Dice Molecules 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 Dice Molecules will offset losses from the drop in Dice Molecules' long position.The idea behind General Motors and Dice Molecules Holdings 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.| Dice Molecules vs. Nuvalent | Dice Molecules vs. Arcellx | Dice Molecules vs. Vaxcyte | Dice Molecules vs. Viridian Therapeutics |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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