Correlation Between GM and Divio Technologies
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By analyzing existing cross correlation between General Motors and Divio Technologies AB, you can compare the effects of market volatilities on GM and Divio Technologies 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 Divio Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Divio Technologies.
Diversification Opportunities for GM and Divio Technologies
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GM and Divio is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Divio Technologies AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Divio Technologies 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 Divio Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Divio Technologies has no effect on the direction of GM i.e., GM and Divio Technologies go up and down completely randomly.
Pair Corralation between GM and Divio Technologies
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.66 times more return on investment than Divio Technologies. However, General Motors is 1.51 times less risky than Divio Technologies. It trades about 0.12 of its potential returns per unit of risk. Divio Technologies AB is currently generating about -0.12 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 353.00 from holding General Motors or generate 6.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Divio Technologies AB
Performance |
| Timeline |
| General Motors |
| Divio Technologies |
GM and Divio Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Divio Technologies
The main advantage of trading using opposite GM and Divio Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Divio Technologies 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 Divio Technologies will offset losses from the drop in Divio Technologies' long position.The idea behind General Motors and Divio Technologies AB 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.| Divio Technologies vs. G5 Entertainment publ | Divio Technologies vs. Catena Media plc | Divio Technologies vs. Crunchfish AB | Divio Technologies vs. FormPipe Software AB |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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