Correlation Between GM and Levinstein Prop
Can any of the company-specific risk be diversified away by investing in both GM and Levinstein Prop 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 Levinstein Prop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Levinstein Prop, you can compare the effects of market volatilities on GM and Levinstein Prop 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 Levinstein Prop. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Levinstein Prop.
Diversification Opportunities for GM and Levinstein Prop
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Levinstein is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Levinstein Prop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Levinstein Prop 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 Levinstein Prop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Levinstein Prop has no effect on the direction of GM i.e., GM and Levinstein Prop go up and down completely randomly.
Pair Corralation between GM and Levinstein Prop
Allowing for the 90-day total investment horizon GM is expected to generate 6.75 times less return on investment than Levinstein Prop. In addition to that, GM is 1.18 times more volatile than Levinstein Prop. It trades about 0.07 of its total potential returns per unit of risk. Levinstein Prop is currently generating about 0.59 per unit of volatility. If you would invest 566,400 in Levinstein Prop on August 29, 2024 and sell it today you would earn a total of 163,600 from holding Levinstein Prop or generate 28.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 81.82% |
| Values | Daily Returns |
General Motors vs. Levinstein Prop
Performance |
| Timeline |
| General Motors |
| Levinstein Prop |
GM and Levinstein Prop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Levinstein Prop
The main advantage of trading using opposite GM and Levinstein Prop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Levinstein Prop 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 Levinstein Prop will offset losses from the drop in Levinstein Prop's long position.The idea behind General Motors and Levinstein Prop 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.| Levinstein Prop vs. Israel Canada | Levinstein Prop vs. Delek Group | Levinstein Prop vs. Shikun Binui | Levinstein Prop vs. Israel Discount Bank |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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