Correlation Between GM and LACTATE NATURA
Can any of the company-specific risk be diversified away by investing in both GM and LACTATE NATURA 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 LACTATE NATURA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and LACTATE NATURA SA, you can compare the effects of market volatilities on GM and LACTATE NATURA 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 LACTATE NATURA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and LACTATE NATURA.
Diversification Opportunities for GM and LACTATE NATURA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and LACTATE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and LACTATE NATURA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LACTATE NATURA 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 LACTATE NATURA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LACTATE NATURA SA has no effect on the direction of GM i.e., GM and LACTATE NATURA go up and down completely randomly.
Pair Corralation between GM and LACTATE NATURA
If you would invest (100.00) in LACTATE NATURA SA on January 5, 2025 and sell it today you would earn a total of 100.00 from holding LACTATE NATURA SA or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
General Motors vs. LACTATE NATURA SA
Performance |
| Timeline |
| General Motors |
| LACTATE NATURA SA |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
GM and LACTATE NATURA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and LACTATE NATURA
The main advantage of trading using opposite GM and LACTATE NATURA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, LACTATE NATURA 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 LACTATE NATURA will offset losses from the drop in LACTATE NATURA's long position.The idea behind General Motors and LACTATE NATURA 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.| LACTATE NATURA vs. TRANSILVANIA LEASING SI | LACTATE NATURA vs. Infinity Capital Investments | LACTATE NATURA vs. Biofarm Bucure | LACTATE NATURA vs. AROBS TRANSILVANIA SOFTWARE |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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