Correlation Between GM and Fidelity Dividend
Can any of the company-specific risk be diversified away by investing in both GM and Fidelity Dividend 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 Fidelity Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Fidelity Dividend ETF, you can compare the effects of market volatilities on GM and Fidelity Dividend 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 Fidelity Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Fidelity Dividend.
Diversification Opportunities for GM and Fidelity Dividend
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Fidelity is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Fidelity Dividend ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Dividend ETF 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 Fidelity Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Dividend ETF has no effect on the direction of GM i.e., GM and Fidelity Dividend go up and down completely randomly.
Pair Corralation between GM and Fidelity Dividend
Allowing for the 90-day total investment horizon General Motors is expected to generate 3.75 times more return on investment than Fidelity Dividend. However, GM is 3.75 times more volatile than Fidelity Dividend ETF. It trades about 0.08 of its potential returns per unit of risk. Fidelity Dividend ETF is currently generating about 0.14 per unit of risk. If you would invest 4,893 in General Motors on August 28, 2024 and sell it today you would earn a total of 586.00 from holding General Motors or generate 11.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Fidelity Dividend ETF
Performance |
| Timeline |
| General Motors |
| Fidelity Dividend ETF |
GM and Fidelity Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Fidelity Dividend
The main advantage of trading using opposite GM and Fidelity Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Fidelity Dividend 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 Fidelity Dividend will offset losses from the drop in Fidelity Dividend's long position.The idea behind General Motors and Fidelity Dividend ETF 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.| Fidelity Dividend vs. BlackRock ETF Trust | Fidelity Dividend vs. Rbb Fund | Fidelity Dividend vs. Virtus ETF Trust | Fidelity Dividend vs. Amplify CWP Enhanced |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |