Correlation Between GM and GRENKELEASING Dusseldorf
Can any of the company-specific risk be diversified away by investing in both GM and GRENKELEASING Dusseldorf 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 GRENKELEASING Dusseldorf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and GRENKELEASING Dusseldorf, you can compare the effects of market volatilities on GM and GRENKELEASING Dusseldorf 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 GRENKELEASING Dusseldorf. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and GRENKELEASING Dusseldorf.
Diversification Opportunities for GM and GRENKELEASING Dusseldorf
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GM and GRENKELEASING is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and GRENKELEASING Dusseldorf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRENKELEASING Dusseldorf 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 GRENKELEASING Dusseldorf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRENKELEASING Dusseldorf has no effect on the direction of GM i.e., GM and GRENKELEASING Dusseldorf go up and down completely randomly.
Pair Corralation between GM and GRENKELEASING Dusseldorf
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the GRENKELEASING Dusseldorf. In addition to that, GM is 1.62 times more volatile than GRENKELEASING Dusseldorf. It trades about -0.06 of its total potential returns per unit of risk. GRENKELEASING Dusseldorf is currently generating about 0.18 per unit of volatility. If you would invest 1,570 in GRENKELEASING Dusseldorf on November 4, 2024 and sell it today you would earn a total of 114.00 from holding GRENKELEASING Dusseldorf or generate 7.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
General Motors vs. GRENKELEASING Dusseldorf
Performance |
| Timeline |
| General Motors |
| GRENKELEASING Dusseldorf |
GM and GRENKELEASING Dusseldorf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and GRENKELEASING Dusseldorf
The main advantage of trading using opposite GM and GRENKELEASING Dusseldorf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, GRENKELEASING Dusseldorf 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 GRENKELEASING Dusseldorf will offset losses from the drop in GRENKELEASING Dusseldorf's long position.The idea behind General Motors and GRENKELEASING Dusseldorf 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.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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |