Correlation Between GM and Immobile
Can any of the company-specific risk be diversified away by investing in both GM and Immobile 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 Immobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Immobile, you can compare the effects of market volatilities on GM and Immobile 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 Immobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Immobile.
Diversification Opportunities for GM and Immobile
Excellent diversification
The 3 months correlation between GM and Immobile is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Immobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immobile 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 Immobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immobile has no effect on the direction of GM i.e., GM and Immobile go up and down completely randomly.
Pair Corralation between GM and Immobile
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.66 times more return on investment than Immobile. However, General Motors is 1.51 times less risky than Immobile. It trades about 0.05 of its potential returns per unit of risk. Immobile is currently generating about 0.02 per unit of risk. If you would invest 3,303 in General Motors on December 12, 2024 and sell it today you would earn a total of 1,525 from holding General Motors or generate 46.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.39% |
| Values | Daily Returns |
General Motors vs. Immobile
Performance |
| Timeline |
| General Motors |
| Immobile |
GM and Immobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Immobile
The main advantage of trading using opposite GM and Immobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Immobile 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 Immobile will offset losses from the drop in Immobile's long position.The idea behind General Motors and Immobile 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.| Immobile vs. GreenX Metals | ||
| Immobile vs. Enter Air SA | ||
| Immobile vs. True Games Syndicate | ||
| Immobile vs. Echo Investment SA |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |