Correlation Between GM and BetaPro Gold
Can any of the company-specific risk be diversified away by investing in both GM and BetaPro 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 BetaPro 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 BetaPro Gold Bullion, you can compare the effects of market volatilities on GM and BetaPro 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 BetaPro Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and BetaPro Gold.
Diversification Opportunities for GM and BetaPro Gold
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GM and BetaPro is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and BetaPro Gold Bullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaPro Gold Bullion 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 BetaPro Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaPro Gold Bullion has no effect on the direction of GM i.e., GM and BetaPro Gold go up and down completely randomly.
Pair Corralation between GM and BetaPro Gold
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.09 times more return on investment than BetaPro Gold. However, GM is 1.09 times more volatile than BetaPro Gold Bullion. It trades about 0.17 of its potential returns per unit of risk. BetaPro Gold Bullion is currently generating about -0.13 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 Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
General Motors vs. BetaPro Gold Bullion
Performance |
| Timeline |
| General Motors |
| BetaPro Gold Bullion |
GM and BetaPro Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and BetaPro Gold
The main advantage of trading using opposite GM and BetaPro Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, BetaPro 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 BetaPro Gold will offset losses from the drop in BetaPro Gold's long position.The idea behind General Motors and BetaPro Gold Bullion 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.| BetaPro Gold vs. BetaPro SPTSX Capped | BetaPro Gold vs. Forstrong Global Income | BetaPro Gold vs. BMO Aggregate Bond | BetaPro Gold vs. iShares Canadian HYBrid |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |