Correlation Between GM and Fpa Flexible
Can any of the company-specific risk be diversified away by investing in both GM and Fpa Flexible 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 Fpa Flexible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Fpa Flexible Fixed, you can compare the effects of market volatilities on GM and Fpa Flexible 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 Fpa Flexible. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Fpa Flexible.
Diversification Opportunities for GM and Fpa Flexible
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Fpa is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Fpa Flexible Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fpa Flexible Fixed 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 Fpa Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fpa Flexible Fixed has no effect on the direction of GM i.e., GM and Fpa Flexible go up and down completely randomly.
Pair Corralation between GM and Fpa Flexible
Allowing for the 90-day total investment horizon General Motors is expected to generate 13.09 times more return on investment than Fpa Flexible. However, GM is 13.09 times more volatile than Fpa Flexible Fixed. It trades about 0.05 of its potential returns per unit of risk. Fpa Flexible Fixed is currently generating about 0.17 per unit of risk. If you would invest 3,805 in General Motors on September 3, 2024 and sell it today you would earn a total of 1,754 from holding General Motors or generate 46.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Fpa Flexible Fixed
Performance |
| Timeline |
| General Motors |
| Fpa Flexible Fixed |
GM and Fpa Flexible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Fpa Flexible
The main advantage of trading using opposite GM and Fpa Flexible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Fpa Flexible 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 Fpa Flexible will offset losses from the drop in Fpa Flexible's long position.The idea behind General Motors and Fpa Flexible Fixed 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.| Fpa Flexible vs. T Rowe Price | Fpa Flexible vs. Northern Small Cap | Fpa Flexible vs. Small Cap Stock | Fpa Flexible vs. Jhancock Diversified Macro |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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