Correlation Between GM and Filinvest Development
Can any of the company-specific risk be diversified away by investing in both GM and Filinvest Development 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 Filinvest Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Filinvest Development Coproration, you can compare the effects of market volatilities on GM and Filinvest Development 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 Filinvest Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Filinvest Development.
Diversification Opportunities for GM and Filinvest Development
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and Filinvest is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Filinvest Development Coprorat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Filinvest Development 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 Filinvest Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Filinvest Development has no effect on the direction of GM i.e., GM and Filinvest Development go up and down completely randomly.
Pair Corralation between GM and Filinvest Development
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Filinvest Development. In addition to that, GM is 1.82 times more volatile than Filinvest Development Coproration. It trades about -0.09 of its total potential returns per unit of risk. Filinvest Development Coproration is currently generating about 0.16 per unit of volatility. If you would invest 489.00 in Filinvest Development Coproration on November 9, 2024 and sell it today you would earn a total of 11.00 from holding Filinvest Development Coproration or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 45.0% |
| Values | Daily Returns |
General Motors vs. Filinvest Development Coprorat
Performance |
| Timeline |
| General Motors |
| Filinvest Development |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
GM and Filinvest Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Filinvest Development
The main advantage of trading using opposite GM and Filinvest Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Filinvest Development 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 Filinvest Development will offset losses from the drop in Filinvest Development's long position.The idea behind General Motors and Filinvest Development Coproration 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.| Filinvest Development vs. Union Bank of | Filinvest Development vs. Converge Information Communications | Filinvest Development vs. Megawide Construction Corp | Filinvest Development vs. STI Education Systems |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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