Correlation Between GM and Lotus Ventures
Can any of the company-specific risk be diversified away by investing in both GM and Lotus Ventures 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 Lotus Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Lotus Ventures, you can compare the effects of market volatilities on GM and Lotus Ventures 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 Lotus Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Lotus Ventures.
Diversification Opportunities for GM and Lotus Ventures
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Lotus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Lotus Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Ventures 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 Lotus Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Ventures has no effect on the direction of GM i.e., GM and Lotus Ventures go up and down completely randomly.
Pair Corralation between GM and Lotus Ventures
If you would invest 5,154 in General Motors on August 30, 2024 and sell it today you would earn a total of 396.00 from holding General Motors or generate 7.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
General Motors vs. Lotus Ventures
Performance |
| Timeline |
| General Motors |
| Lotus Ventures |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Lotus Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Lotus Ventures
The main advantage of trading using opposite GM and Lotus Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Lotus Ventures 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 Lotus Ventures will offset losses from the drop in Lotus Ventures' long position.The idea behind General Motors and Lotus Ventures 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.| Lotus Ventures vs. Benchmark Botanics | Lotus Ventures vs. Speakeasy Cannabis Club | Lotus Ventures vs. City View Green | Lotus Ventures vs. BC Craft Supply |
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.
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