Correlation Between GM and Multi-index 2010

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Can any of the company-specific risk be diversified away by investing in both GM and Multi-index 2010 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 Multi-index 2010 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Multi Index 2010 Lifetime, you can compare the effects of market volatilities on GM and Multi-index 2010 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 Multi-index 2010. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Multi-index 2010.

Diversification Opportunities for GM and Multi-index 2010

GMMulti-indexDiversified AwayGMMulti-indexDiversified Away100%
-0.19
  Correlation Coefficient

Good diversification

The 3 months correlation between GM and Multi-index is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Multi Index 2010 Lifetime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Index 2010 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 Multi-index 2010. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Index 2010 has no effect on the direction of GM i.e., GM and Multi-index 2010 go up and down completely randomly.

Pair Corralation between GM and Multi-index 2010

Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Multi-index 2010. In addition to that, GM is 9.0 times more volatile than Multi Index 2010 Lifetime. It trades about -0.3 of its total potential returns per unit of risk. Multi Index 2010 Lifetime is currently generating about 0.15 per unit of volatility. If you would invest  1,005  in Multi Index 2010 Lifetime on November 25, 2024 and sell it today you would earn a total of  8.00  from holding Multi Index 2010 Lifetime or generate 0.8% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

General Motors  vs.  Multi Index 2010 Lifetime

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-505
JavaScript chart by amCharts 3.21.15GM JRLFX
       Timeline  
General Motors 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days General Motors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb464850525456586062
Multi Index 2010 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Multi Index 2010 Lifetime are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Multi-index 2010 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb9.859.99.951010.0510.110.15

GM and Multi-index 2010 Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.07-3.05-2.02-1.0-0.0150.871.772.673.574.47 1234
JavaScript chart by amCharts 3.21.15GM JRLFX
       Returns  

Pair Trading with GM and Multi-index 2010

The main advantage of trading using opposite GM and Multi-index 2010 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Multi-index 2010 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 Multi-index 2010 will offset losses from the drop in Multi-index 2010's long position.
The idea behind General Motors and Multi Index 2010 Lifetime 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.
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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