Correlation Between GM and Leeds Group
Can any of the company-specific risk be diversified away by investing in both GM and Leeds Group 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 Leeds Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Leeds Group PLC, you can compare the effects of market volatilities on GM and Leeds Group 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 Leeds Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Leeds Group.
Diversification Opportunities for GM and Leeds Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Leeds is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Leeds Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leeds Group PLC 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 Leeds Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leeds Group PLC has no effect on the direction of GM i.e., GM and Leeds Group go up and down completely randomly.
Pair Corralation between GM and Leeds Group
If you would invest 4,539 in General Motors on September 3, 2024 and sell it today you would earn a total of 965.00 from holding General Motors or generate 21.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.8% |
| Values | Daily Returns |
General Motors vs. Leeds Group PLC
Performance |
| Timeline |
| General Motors |
| Leeds Group PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Leeds Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Leeds Group
The main advantage of trading using opposite GM and Leeds Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Leeds Group 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 Leeds Group will offset losses from the drop in Leeds Group's long position.The idea behind General Motors and Leeds Group PLC 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.| Leeds Group vs. BE Semiconductor Industries | Leeds Group vs. Playtech Plc | Leeds Group vs. PureTech Health plc | Leeds Group vs. Roper Technologies |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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