Correlation Between GM and Johcm Emerging
Can any of the company-specific risk be diversified away by investing in both GM and Johcm Emerging 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 Johcm Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Johcm Emerging Markets, you can compare the effects of market volatilities on GM and Johcm Emerging 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 Johcm Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Johcm Emerging.
Diversification Opportunities for GM and Johcm Emerging
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GM and Johcm is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Johcm Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johcm Emerging Markets 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 Johcm Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johcm Emerging Markets has no effect on the direction of GM i.e., GM and Johcm Emerging go up and down completely randomly.
Pair Corralation between GM and Johcm Emerging
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.86 times more return on investment than Johcm Emerging. However, GM is 2.86 times more volatile than Johcm Emerging Markets. It trades about 0.05 of its potential returns per unit of risk. Johcm Emerging Markets is currently generating about 0.08 per unit of risk. If you would invest 3,765 in General Motors on September 4, 2024 and sell it today you would earn a total of 1,739 from holding General Motors or generate 46.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Johcm Emerging Markets
Performance |
| Timeline |
| General Motors |
| Johcm Emerging Markets |
GM and Johcm Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Johcm Emerging
The main advantage of trading using opposite GM and Johcm Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Johcm Emerging 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 Johcm Emerging will offset losses from the drop in Johcm Emerging's long position.The idea behind General Motors and Johcm Emerging Markets 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.| Johcm Emerging vs. Ms Global Fixed | Johcm Emerging vs. The Hartford Equity | Johcm Emerging vs. Calamos Global Equity | Johcm Emerging vs. Gmo Global Equity |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |