Correlation Between GM and Investcorp India
Can any of the company-specific risk be diversified away by investing in both GM and Investcorp India 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 Investcorp India into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Investcorp India Acquisition, you can compare the effects of market volatilities on GM and Investcorp India 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 Investcorp India. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Investcorp India.
Diversification Opportunities for GM and Investcorp India
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and Investcorp is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Investcorp India Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investcorp India Acq 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 Investcorp India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investcorp India Acq has no effect on the direction of GM i.e., GM and Investcorp India go up and down completely randomly.
Pair Corralation between GM and Investcorp India
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Investcorp India. In addition to that, GM is 2.47 times more volatile than Investcorp India Acquisition. It trades about 0.0 of its total potential returns per unit of risk. Investcorp India Acquisition is currently generating about 0.08 per unit of volatility. If you would invest 1,167 in Investcorp India Acquisition on October 26, 2024 and sell it today you would earn a total of 17.00 from holding Investcorp India Acquisition or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Investcorp India Acquisition
Performance |
| Timeline |
| General Motors |
| Investcorp India Acq |
GM and Investcorp India Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Investcorp India
The main advantage of trading using opposite GM and Investcorp India positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Investcorp India 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 Investcorp India will offset losses from the drop in Investcorp India's long position.The idea behind General Motors and Investcorp India Acquisition 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.| Investcorp India vs. Westrock Coffee | Investcorp India vs. Allient | Investcorp India vs. Amkor Technology | Investcorp India vs. Molson Coors Brewing |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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