Correlation Between GM and CoreShares
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By analyzing existing cross correlation between General Motors and CoreShares SP Global, you can compare the effects of market volatilities on GM and CoreShares 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 CoreShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and CoreShares.
Diversification Opportunities for GM and CoreShares
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and CoreShares is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and CoreShares SP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreShares SP Global 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 CoreShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoreShares SP Global has no effect on the direction of GM i.e., GM and CoreShares go up and down completely randomly.
Pair Corralation between GM and CoreShares
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.52 times more return on investment than CoreShares. However, GM is 2.52 times more volatile than CoreShares SP Global. It trades about 0.03 of its potential returns per unit of risk. CoreShares SP Global is currently generating about 0.03 per unit of risk. If you would invest 3,794 in General Motors on November 19, 2024 and sell it today you would earn a total of 1,043 from holding General Motors or generate 27.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
General Motors vs. CoreShares SP Global
Performance |
| Timeline |
| General Motors |
| CoreShares SP Global |
GM and CoreShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and CoreShares
The main advantage of trading using opposite GM and CoreShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, CoreShares 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 CoreShares will offset losses from the drop in CoreShares' long position.The idea behind General Motors and CoreShares SP Global 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.| CoreShares vs. CoreShares SP 500 | CoreShares vs. CoreShares Income AMETF | CoreShares vs. CoreShares Preference Share | CoreShares vs. CoreShares Yield Selected |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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