Correlation Between GM and Ecofin Global
Can any of the company-specific risk be diversified away by investing in both GM and Ecofin Global 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 Ecofin Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Ecofin Global Utilities, you can compare the effects of market volatilities on GM and Ecofin Global 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 Ecofin Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Ecofin Global.
Diversification Opportunities for GM and Ecofin Global
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Ecofin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Ecofin Global Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecofin Global Utilities 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 Ecofin Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecofin Global Utilities has no effect on the direction of GM i.e., GM and Ecofin Global go up and down completely randomly.
Pair Corralation between GM and Ecofin Global
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Ecofin Global. In addition to that, GM is 2.47 times more volatile than Ecofin Global Utilities. It trades about -0.34 of its total potential returns per unit of risk. Ecofin Global Utilities is currently generating about 0.17 per unit of volatility. If you would invest 18,289 in Ecofin Global Utilities on November 27, 2024 and sell it today you would earn a total of 611.00 from holding Ecofin Global Utilities or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
General Motors vs. Ecofin Global Utilities
Performance |
| Timeline |
| General Motors |
| Ecofin Global Utilities |
GM and Ecofin Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Ecofin Global
The main advantage of trading using opposite GM and Ecofin Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Ecofin Global 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 Ecofin Global will offset losses from the drop in Ecofin Global's long position.The idea behind General Motors and Ecofin Global Utilities 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.| Ecofin Global vs. Elmos Semiconductor SE | Ecofin Global vs. Taiwan Semiconductor Manufacturing | Ecofin Global vs. CNH Industrial NV | Ecofin Global vs. BE Semiconductor Industries |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |