Correlation Between GM and BlackRock ESG
Can any of the company-specific risk be diversified away by investing in both GM and BlackRock ESG 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 BlackRock ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and BlackRock ESG Multi Asset, you can compare the effects of market volatilities on GM and BlackRock ESG 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 BlackRock ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and BlackRock ESG.
Diversification Opportunities for GM and BlackRock ESG
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and BlackRock is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and BlackRock ESG Multi Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock ESG Multi 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 BlackRock ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock ESG Multi has no effect on the direction of GM i.e., GM and BlackRock ESG go up and down completely randomly.
Pair Corralation between GM and BlackRock ESG
Allowing for the 90-day total investment horizon General Motors is expected to generate 8.14 times more return on investment than BlackRock ESG. However, GM is 8.14 times more volatile than BlackRock ESG Multi Asset. It trades about 0.17 of its potential returns per unit of risk. BlackRock ESG Multi Asset is currently generating about 0.35 per unit of risk. If you would invest 5,076 in General Motors on September 1, 2024 and sell it today you would earn a total of 483.00 from holding General Motors or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
General Motors vs. BlackRock ESG Multi Asset
Performance |
| Timeline |
| General Motors |
| BlackRock ESG Multi |
GM and BlackRock ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and BlackRock ESG
The main advantage of trading using opposite GM and BlackRock ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, BlackRock ESG 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 BlackRock ESG will offset losses from the drop in BlackRock ESG's long position.The idea behind General Motors and BlackRock ESG Multi Asset 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.| BlackRock ESG vs. WisdomTree Natural Gas | BlackRock ESG vs. Leverage Shares 3x | BlackRock ESG vs. GraniteShares 3x Short | BlackRock ESG vs. Leverage Shares 3x |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |