Correlation Between GM and Insig Ai
Can any of the company-specific risk be diversified away by investing in both GM and Insig Ai 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 Insig Ai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Insig Ai PLC, you can compare the effects of market volatilities on GM and Insig Ai 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 Insig Ai. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Insig Ai.
Diversification Opportunities for GM and Insig Ai
Very weak diversification
The 3 months correlation between GM and Insig is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Insig Ai PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insig Ai PLC 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 Insig Ai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insig Ai PLC has no effect on the direction of GM i.e., GM and Insig Ai go up and down completely randomly.
Pair Corralation between GM and Insig Ai
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.42 times more return on investment than Insig Ai. However, General Motors is 2.39 times less risky than Insig Ai. It trades about 0.14 of its potential returns per unit of risk. Insig Ai PLC is currently generating about -0.01 per unit of risk. If you would invest 3,210 in General Motors on August 27, 2024 and sell it today you would earn a total of 2,643 from holding General Motors or generate 82.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
General Motors vs. Insig Ai PLC
Performance |
| Timeline |
| General Motors |
| Insig Ai PLC |
GM and Insig Ai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Insig Ai
The main advantage of trading using opposite GM and Insig Ai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Insig Ai 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 Insig Ai will offset losses from the drop in Insig Ai's long position.The idea behind General Motors and Insig Ai PLC 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.| Insig Ai vs. Evolution Gaming Group | Insig Ai vs. Erste Group Bank | Insig Ai vs. Cincinnati Financial Corp | Insig Ai vs. Games Workshop Group |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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