Correlation Between GM and Lkcm Fixed
Can any of the company-specific risk be diversified away by investing in both GM and Lkcm Fixed 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 Lkcm Fixed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Lkcm Fixed Income, you can compare the effects of market volatilities on GM and Lkcm Fixed 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 Lkcm Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Lkcm Fixed.
Diversification Opportunities for GM and Lkcm Fixed
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Lkcm is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Lkcm Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Fixed Income 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 Lkcm Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm Fixed Income has no effect on the direction of GM i.e., GM and Lkcm Fixed go up and down completely randomly.
Pair Corralation between GM and Lkcm Fixed
Allowing for the 90-day total investment horizon General Motors is expected to generate 10.04 times more return on investment than Lkcm Fixed. However, GM is 10.04 times more volatile than Lkcm Fixed Income. It trades about 0.05 of its potential returns per unit of risk. Lkcm Fixed Income is currently generating about 0.08 per unit of risk. If you would invest 3,757 in General Motors on August 30, 2024 and sell it today you would earn a total of 1,793 from holding General Motors or generate 47.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Lkcm Fixed Income
Performance |
| Timeline |
| General Motors |
| Lkcm Fixed Income |
GM and Lkcm Fixed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Lkcm Fixed
The main advantage of trading using opposite GM and Lkcm Fixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Lkcm Fixed 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 Lkcm Fixed will offset losses from the drop in Lkcm Fixed's long position.The idea behind General Motors and Lkcm Fixed Income 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.| Lkcm Fixed vs. Gmo Resources | Lkcm Fixed vs. Goldman Sachs Mlp | Lkcm Fixed vs. Firsthand Alternative Energy | Lkcm Fixed vs. Oil Gas Ultrasector |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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