Correlation Between GM and Molecule Holdings
Can any of the company-specific risk be diversified away by investing in both GM and Molecule Holdings 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 Molecule Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Molecule Holdings, you can compare the effects of market volatilities on GM and Molecule Holdings 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 Molecule Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Molecule Holdings.
Diversification Opportunities for GM and Molecule Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Molecule is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Molecule Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molecule Holdings 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 Molecule Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molecule Holdings has no effect on the direction of GM i.e., GM and Molecule Holdings go up and down completely randomly.
Pair Corralation between GM and Molecule Holdings
If you would invest 4,044 in General Motors on September 1, 2024 and sell it today you would earn a total of 1,515 from holding General Motors or generate 37.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.47% |
| Values | Daily Returns |
General Motors vs. Molecule Holdings
Performance |
| Timeline |
| General Motors |
| Molecule Holdings |
GM and Molecule Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Molecule Holdings
The main advantage of trading using opposite GM and Molecule Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Molecule Holdings 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 Molecule Holdings will offset losses from the drop in Molecule Holdings' long position.The idea behind General Motors and Molecule Holdings 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.| Molecule Holdings vs. Hypera SA | Molecule Holdings vs. YourWay Cannabis Brands | Molecule Holdings vs. Cumberland Pharmaceuticals | Molecule Holdings vs. Speakeasy Cannabis Club |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |