Correlation Between GM and Fluoguide
Can any of the company-specific risk be diversified away by investing in both GM and Fluoguide 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 Fluoguide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Fluoguide AS, you can compare the effects of market volatilities on GM and Fluoguide 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 Fluoguide. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Fluoguide.
Diversification Opportunities for GM and Fluoguide
Excellent diversification
The 3 months correlation between GM and Fluoguide is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Fluoguide AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluoguide AS 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 Fluoguide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluoguide AS has no effect on the direction of GM i.e., GM and Fluoguide go up and down completely randomly.
Pair Corralation between GM and Fluoguide
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Fluoguide. But the stock apears to be less risky and, when comparing its historical volatility, General Motors is 1.49 times less risky than Fluoguide. The stock trades about -0.32 of its potential returns per unit of risk. The Fluoguide AS is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 4,825 in Fluoguide AS on November 28, 2024 and sell it today you would lose (385.00) from holding Fluoguide AS or give up 7.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
General Motors vs. Fluoguide AS
Performance |
| Timeline |
| General Motors |
| Fluoguide AS |
GM and Fluoguide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Fluoguide
The main advantage of trading using opposite GM and Fluoguide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Fluoguide 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 Fluoguide will offset losses from the drop in Fluoguide's long position.The idea behind General Motors and Fluoguide AS 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.| Fluoguide vs. ExpreS2ion Biotech Holding | Fluoguide vs. Hansa Biopharma AB | Fluoguide vs. cBrain AS | Fluoguide vs. BioPorto |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| 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 | |
| Stocks Directory Find actively traded stocks across global markets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |