Correlation Between GM and Ft 9118
Can any of the company-specific risk be diversified away by investing in both GM and Ft 9118 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 Ft 9118 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Ft 9118 Technology, you can compare the effects of market volatilities on GM and Ft 9118 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 Ft 9118. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Ft 9118.
Diversification Opportunities for GM and Ft 9118
Very good diversification
The 3 months correlation between GM and FKWGLX is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Ft 9118 Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ft 9118 Technology 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 Ft 9118. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ft 9118 Technology has no effect on the direction of GM i.e., GM and Ft 9118 go up and down completely randomly.
Pair Corralation between GM and Ft 9118
If you would invest 4,484 in General Motors on August 31, 2024 and sell it today you would earn a total of 1,066 from holding General Motors or generate 23.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 2.27% |
| Values | Daily Returns |
General Motors vs. Ft 9118 Technology
Performance |
| Timeline |
| General Motors |
| Ft 9118 Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Ft 9118 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Ft 9118
The main advantage of trading using opposite GM and Ft 9118 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Ft 9118 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 Ft 9118 will offset losses from the drop in Ft 9118's long position.The idea behind General Motors and Ft 9118 Technology 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.| Ft 9118 vs. Strategic Allocation Aggressive | Ft 9118 vs. Ab Global Risk | Ft 9118 vs. Artisan High Income | Ft 9118 vs. T Rowe Price |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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