Correlation Between GM and ION Geophysical
Can any of the company-specific risk be diversified away by investing in both GM and ION Geophysical 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 ION Geophysical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and ION Geophysical, you can compare the effects of market volatilities on GM and ION Geophysical 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 ION Geophysical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and ION Geophysical.
Diversification Opportunities for GM and ION Geophysical
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and ION is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and ION Geophysical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ION Geophysical 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 ION Geophysical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ION Geophysical has no effect on the direction of GM i.e., GM and ION Geophysical go up and down completely randomly.
Pair Corralation between GM and ION Geophysical
If you would invest (100.00) in ION Geophysical on November 28, 2024 and sell it today you would earn a total of 100.00 from holding ION Geophysical 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. ION Geophysical
Performance |
| Timeline |
| General Motors |
| ION Geophysical |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
GM and ION Geophysical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and ION Geophysical
The main advantage of trading using opposite GM and ION Geophysical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, ION Geophysical 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 ION Geophysical will offset losses from the drop in ION Geophysical's long position.The idea behind General Motors and ION Geophysical 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.| ION Geophysical vs. Analog Devices | ION Geophysical vs. Alto Neuroscience, | ION Geophysical vs. Keurig Dr Pepper | ION Geophysical vs. Universal |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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