Correlation Between GM and Gurktaler Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both GM and Gurktaler Aktiengesellscha 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 Gurktaler Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Gurktaler Aktiengesellschaft, you can compare the effects of market volatilities on GM and Gurktaler Aktiengesellscha 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 Gurktaler Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Gurktaler Aktiengesellscha.
Diversification Opportunities for GM and Gurktaler Aktiengesellscha
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and Gurktaler is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Gurktaler Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gurktaler Aktiengesellscha 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 Gurktaler Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gurktaler Aktiengesellscha has no effect on the direction of GM i.e., GM and Gurktaler Aktiengesellscha go up and down completely randomly.
Pair Corralation between GM and Gurktaler Aktiengesellscha
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.78 times more return on investment than Gurktaler Aktiengesellscha. However, GM is 2.78 times more volatile than Gurktaler Aktiengesellschaft. It trades about 0.17 of its potential returns per unit of risk. Gurktaler Aktiengesellschaft is currently generating about -0.21 per unit of risk. If you would invest 5,076 in General Motors on September 1, 2024 and sell it today you would earn a total of 483.00 from holding General Motors or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
General Motors vs. Gurktaler Aktiengesellschaft
Performance |
| Timeline |
| General Motors |
| Gurktaler Aktiengesellscha |
GM and Gurktaler Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Gurktaler Aktiengesellscha
The main advantage of trading using opposite GM and Gurktaler Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Gurktaler Aktiengesellscha 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 Gurktaler Aktiengesellscha will offset losses from the drop in Gurktaler Aktiengesellscha's long position.The idea behind General Motors and Gurktaler Aktiengesellschaft 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.| Gurktaler Aktiengesellscha vs. UNIQA Insurance Group | Gurktaler Aktiengesellscha vs. AMAG Austria Metall | Gurktaler Aktiengesellscha vs. SBM Offshore NV | Gurktaler Aktiengesellscha vs. Oberbank AG |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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