Correlation Between GM and HANNRUECKVSE ADR
Can any of the company-specific risk be diversified away by investing in both GM and HANNRUECKVSE ADR 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 HANNRUECKVSE ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and HANNRUECKVSE ADR 12ON, you can compare the effects of market volatilities on GM and HANNRUECKVSE ADR 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 HANNRUECKVSE ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and HANNRUECKVSE ADR.
Diversification Opportunities for GM and HANNRUECKVSE ADR
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GM and HANNRUECKVSE is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and HANNRUECKVSE ADR 12ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANNRUECKVSE ADR 12ON 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 HANNRUECKVSE ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANNRUECKVSE ADR 12ON has no effect on the direction of GM i.e., GM and HANNRUECKVSE ADR go up and down completely randomly.
Pair Corralation between GM and HANNRUECKVSE ADR
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.6 times more return on investment than HANNRUECKVSE ADR. However, General Motors is 1.67 times less risky than HANNRUECKVSE ADR. It trades about 0.04 of its potential returns per unit of risk. HANNRUECKVSE ADR 12ON is currently generating about -0.02 per unit of risk. If you would invest 4,086 in General Motors on September 1, 2024 and sell it today you would earn a total of 1,473 from holding General Motors or generate 36.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.27% |
| Values | Daily Returns |
General Motors vs. HANNRUECKVSE ADR 12ON
Performance |
| Timeline |
| General Motors |
| HANNRUECKVSE ADR 12ON |
GM and HANNRUECKVSE ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and HANNRUECKVSE ADR
The main advantage of trading using opposite GM and HANNRUECKVSE ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, HANNRUECKVSE ADR 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 HANNRUECKVSE ADR will offset losses from the drop in HANNRUECKVSE ADR's long position.The idea behind General Motors and HANNRUECKVSE ADR 12ON 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.| HANNRUECKVSE ADR vs. SIDETRADE EO 1 | HANNRUECKVSE ADR vs. Neinor Homes SA | HANNRUECKVSE ADR vs. Haier Smart Home | HANNRUECKVSE ADR vs. NURAN WIRELESS INC |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |