Correlation Between GM and ELITE MEAT
Can any of the company-specific risk be diversified away by investing in both GM and ELITE MEAT 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 ELITE MEAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and ELITE MEAT PROCESSORS, you can compare the effects of market volatilities on GM and ELITE MEAT 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 ELITE MEAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and ELITE MEAT.
Diversification Opportunities for GM and ELITE MEAT
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and ELITE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and ELITE MEAT PROCESSORS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELITE MEAT PROCESSORS 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 ELITE MEAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELITE MEAT PROCESSORS has no effect on the direction of GM i.e., GM and ELITE MEAT go up and down completely randomly.
Pair Corralation between GM and ELITE MEAT
If you would invest 2,815 in General Motors on September 14, 2024 and sell it today you would earn a total of 2,436 from holding General Motors or generate 86.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 2.97% |
| Values | Daily Returns |
General Motors vs. ELITE MEAT PROCESSORS
Performance |
| Timeline |
| General Motors |
| ELITE MEAT PROCESSORS |
GM and ELITE MEAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and ELITE MEAT
The main advantage of trading using opposite GM and ELITE MEAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, ELITE MEAT 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 ELITE MEAT will offset losses from the drop in ELITE MEAT's long position.The idea behind General Motors and ELITE MEAT PROCESSORS 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.| ELITE MEAT vs. FINCORP INVESTMENT LTD | ELITE MEAT vs. LOTTOTECH LTD | ELITE MEAT vs. LUX ISLAND RESORTS | ELITE MEAT vs. PSG FINANCIAL SERVICES |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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