Correlation Between GM and Holaluz Clidom
Can any of the company-specific risk be diversified away by investing in both GM and Holaluz Clidom 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 Holaluz Clidom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Holaluz Clidom SA, you can compare the effects of market volatilities on GM and Holaluz Clidom 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 Holaluz Clidom. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Holaluz Clidom.
Diversification Opportunities for GM and Holaluz Clidom
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and Holaluz is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Holaluz Clidom SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holaluz Clidom SA 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 Holaluz Clidom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holaluz Clidom SA has no effect on the direction of GM i.e., GM and Holaluz Clidom go up and down completely randomly.
Pair Corralation between GM and Holaluz Clidom
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Holaluz Clidom. But the stock apears to be less risky and, when comparing its historical volatility, General Motors is 1.73 times less risky than Holaluz Clidom. The stock trades about -0.01 of its potential returns per unit of risk. The Holaluz Clidom SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 127.00 in Holaluz Clidom SA on December 1, 2024 and sell it today you would earn a total of 6.00 from holding Holaluz Clidom SA or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
General Motors vs. Holaluz Clidom SA
Performance |
| Timeline |
| General Motors |
| Holaluz Clidom SA |
GM and Holaluz Clidom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Holaluz Clidom
The main advantage of trading using opposite GM and Holaluz Clidom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Holaluz Clidom 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 Holaluz Clidom will offset losses from the drop in Holaluz Clidom's long position.The idea behind General Motors and Holaluz Clidom SA 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.| Holaluz Clidom vs. Grenergy Renovables SA | Holaluz Clidom vs. Audax Renovables SA | Holaluz Clidom vs. Solaria Energa y | Holaluz Clidom vs. Lleidanetworks Serveis Telematics |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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