Correlation Between GM and VERU INC
Can any of the company-specific risk be diversified away by investing in both GM and VERU INC 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 VERU INC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and VERU INC DL 01, you can compare the effects of market volatilities on GM and VERU INC 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 VERU INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and VERU INC.
Diversification Opportunities for GM and VERU INC
Excellent diversification
The 3 months correlation between GM and VERU is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and VERU INC DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VERU INC DL 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 VERU INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VERU INC DL has no effect on the direction of GM i.e., GM and VERU INC go up and down completely randomly.
Pair Corralation between GM and VERU INC
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.32 times more return on investment than VERU INC. However, General Motors is 3.14 times less risky than VERU INC. It trades about 0.04 of its potential returns per unit of risk. VERU INC DL 01 is currently generating about -0.03 per unit of risk. If you would invest 3,568 in General Motors on October 13, 2024 and sell it today you would earn a total of 1,417 from holding General Motors or generate 39.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
General Motors vs. VERU INC DL 01
Performance |
| Timeline |
| General Motors |
| VERU INC DL |
GM and VERU INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and VERU INC
The main advantage of trading using opposite GM and VERU INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, VERU INC 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 VERU INC will offset losses from the drop in VERU INC's long position.| GM vs. Canoo Inc | GM vs. Aquagold International | GM vs. Morningstar Unconstrained Allocation | GM vs. Thrivent High Yield |
| VERU INC vs. Gruppo Mutuionline SpA | VERU INC vs. Lamar Advertising | VERU INC vs. SERI INDUSTRIAL EO | VERU INC vs. Salesforce |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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