Correlation Between GM and CardioComm Solutions
Can any of the company-specific risk be diversified away by investing in both GM and CardioComm Solutions 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 CardioComm Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and CardioComm Solutions, you can compare the effects of market volatilities on GM and CardioComm Solutions 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 CardioComm Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and CardioComm Solutions.
Diversification Opportunities for GM and CardioComm Solutions
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GM and CardioComm is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and CardioComm Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CardioComm Solutions 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 CardioComm Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CardioComm Solutions has no effect on the direction of GM i.e., GM and CardioComm Solutions go up and down completely randomly.
Pair Corralation between GM and CardioComm Solutions
If you would invest 5,154 in General Motors on August 30, 2024 and sell it today you would earn a total of 396.00 from holding General Motors or generate 7.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. CardioComm Solutions
Performance |
| Timeline |
| General Motors |
| CardioComm Solutions |
GM and CardioComm Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and CardioComm Solutions
The main advantage of trading using opposite GM and CardioComm Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, CardioComm Solutions 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 CardioComm Solutions will offset losses from the drop in CardioComm Solutions' long position.The idea behind General Motors and CardioComm Solutions 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.| CardioComm Solutions vs. Caduceus Software Systems | CardioComm Solutions vs. Cogstate Limited | CardioComm Solutions vs. Cloud DX |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Stocks Directory Find actively traded stocks across global markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |