Correlation Between GM and Inpex Corp
Can any of the company-specific risk be diversified away by investing in both GM and Inpex Corp 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 Inpex Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Inpex Corp ADR, you can compare the effects of market volatilities on GM and Inpex Corp 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 Inpex Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Inpex Corp.
Diversification Opportunities for GM and Inpex Corp
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and Inpex is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Inpex Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inpex Corp ADR 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 Inpex Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inpex Corp ADR has no effect on the direction of GM i.e., GM and Inpex Corp go up and down completely randomly.
Pair Corralation between GM and Inpex Corp
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Inpex Corp. In addition to that, GM is 1.29 times more volatile than Inpex Corp ADR. It trades about -0.14 of its total potential returns per unit of risk. Inpex Corp ADR is currently generating about -0.15 per unit of volatility. If you would invest 1,299 in Inpex Corp ADR on January 7, 2025 and sell it today you would lose (83.00) from holding Inpex Corp ADR or give up 6.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
General Motors vs. Inpex Corp ADR
Performance |
| Timeline |
| General Motors |
| Inpex Corp ADR |
GM and Inpex Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Inpex Corp
The main advantage of trading using opposite GM and Inpex Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Inpex Corp 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 Inpex Corp will offset losses from the drop in Inpex Corp's long position.The idea behind General Motors and Inpex Corp ADR 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.| Inpex Corp vs. Africa Oil Corp | Inpex Corp vs. Athabasca Oil Corp | Inpex Corp vs. Journey Energy | Inpex Corp vs. Aquagold International |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |