Correlation Between GM and DORO AB
Can any of the company-specific risk be diversified away by investing in both GM and DORO AB 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 DORO AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and DORO AB, you can compare the effects of market volatilities on GM and DORO AB 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 DORO AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and DORO AB.
Diversification Opportunities for GM and DORO AB
Very weak diversification
The 3 months correlation between GM and DORO is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and DORO AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DORO AB 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 DORO AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DORO AB has no effect on the direction of GM i.e., GM and DORO AB go up and down completely randomly.
Pair Corralation between GM and DORO AB
Allowing for the 90-day total investment horizon General Motors is expected to generate 3.71 times more return on investment than DORO AB. However, GM is 3.71 times more volatile than DORO AB. It trades about 0.16 of its potential returns per unit of risk. DORO AB is currently generating about -0.14 per unit of risk. If you would invest 5,096 in General Motors on September 2, 2024 and sell it today you would earn a total of 463.00 from holding General Motors or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
General Motors vs. DORO AB
Performance |
| Timeline |
| General Motors |
| DORO AB |
GM and DORO AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and DORO AB
The main advantage of trading using opposite GM and DORO AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, DORO AB 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 DORO AB will offset losses from the drop in DORO AB's long position.The idea behind General Motors and DORO 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.| DORO AB vs. Novotek AB | DORO AB vs. Addnode Group AB | DORO AB vs. Softronic AB | DORO AB vs. CTT Systems 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |