Correlation Between GM and Marvel Gold
Can any of the company-specific risk be diversified away by investing in both GM and Marvel Gold 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 Marvel Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Marvel Gold Limited, you can compare the effects of market volatilities on GM and Marvel Gold 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 Marvel Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Marvel Gold.
Diversification Opportunities for GM and Marvel Gold
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Marvel is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Marvel Gold Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marvel Gold Limited 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 Marvel Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marvel Gold Limited has no effect on the direction of GM i.e., GM and Marvel Gold go up and down completely randomly.
Pair Corralation between GM and Marvel Gold
If you would invest 5,180 in General Motors on September 3, 2024 and sell it today you would earn a total of 379.00 from holding General Motors or generate 7.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Marvel Gold Limited
Performance |
| Timeline |
| General Motors |
| Marvel Gold Limited |
GM and Marvel Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Marvel Gold
The main advantage of trading using opposite GM and Marvel Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Marvel Gold 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 Marvel Gold will offset losses from the drop in Marvel Gold's long position.The idea behind General Motors and Marvel Gold Limited 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.| Marvel Gold vs. Harmony Gold Mining | Marvel Gold vs. SPACE | Marvel Gold vs. T Rowe Price | Marvel Gold vs. Ampleforth |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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