Correlation Between GM and Beta ETF
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By analyzing existing cross correlation between General Motors and Beta ETF WIG20Short, you can compare the effects of market volatilities on GM and Beta ETF 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 Beta ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Beta ETF.
Diversification Opportunities for GM and Beta ETF
Poor diversification
The 3 months correlation between GM and Beta is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Beta ETF WIG20Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beta ETF WIG20Short 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 Beta ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beta ETF WIG20Short has no effect on the direction of GM i.e., GM and Beta ETF go up and down completely randomly.
Pair Corralation between GM and Beta ETF
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.8 times more return on investment than Beta ETF. However, GM is 1.8 times more volatile than Beta ETF WIG20Short. It trades about 0.07 of its potential returns per unit of risk. Beta ETF WIG20Short is currently generating about 0.09 per unit of risk. If you would invest 5,273 in General Motors on August 29, 2024 and sell it today you would earn a total of 206.00 from holding General Motors or generate 3.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
General Motors vs. Beta ETF WIG20Short
Performance |
| Timeline |
| General Motors |
| Beta ETF WIG20Short |
GM and Beta ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Beta ETF
The main advantage of trading using opposite GM and Beta ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Beta ETF 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 Beta ETF will offset losses from the drop in Beta ETF's long position.The idea behind General Motors and Beta ETF WIG20Short 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.| Beta ETF vs. Asseco Business Solutions | Beta ETF vs. Detalion Games SA | Beta ETF vs. Asseco South Eastern | Beta ETF vs. CFI Holding SA |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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