Correlation Between GM and Immolease Trust
Can any of the company-specific risk be diversified away by investing in both GM and Immolease Trust 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 Immolease Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Immolease Trust NV, you can compare the effects of market volatilities on GM and Immolease Trust 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 Immolease Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Immolease Trust.
Diversification Opportunities for GM and Immolease Trust
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GM and Immolease is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Immolease Trust NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immolease Trust NV 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 Immolease Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immolease Trust NV has no effect on the direction of GM i.e., GM and Immolease Trust go up and down completely randomly.
Pair Corralation between GM and Immolease Trust
Allowing for the 90-day total investment horizon General Motors is expected to generate 3.87 times more return on investment than Immolease Trust. However, GM is 3.87 times more volatile than Immolease Trust NV. It trades about -0.05 of its potential returns per unit of risk. Immolease Trust NV is currently generating about -0.55 per unit of risk. If you would invest 5,137 in General Motors on November 3, 2024 and sell it today you would lose (191.00) from holding General Motors or give up 3.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
General Motors vs. Immolease Trust NV
Performance |
| Timeline |
| General Motors |
| Immolease Trust NV |
GM and Immolease Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Immolease Trust
The main advantage of trading using opposite GM and Immolease Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Immolease Trust 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 Immolease Trust will offset losses from the drop in Immolease Trust's long position.The idea behind General Motors and Immolease Trust NV 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.| Immolease Trust vs. Immobiliere Distri Land NV | Immolease Trust vs. Immobel | Immolease Trust vs. Accentis |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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