Correlation Between GM and Multistrada Arah
Can any of the company-specific risk be diversified away by investing in both GM and Multistrada Arah 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 Multistrada Arah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Multistrada Arah Sarana, you can compare the effects of market volatilities on GM and Multistrada Arah 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 Multistrada Arah. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Multistrada Arah.
Diversification Opportunities for GM and Multistrada Arah
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Multistrada is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Multistrada Arah Sarana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multistrada Arah Sarana 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 Multistrada Arah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multistrada Arah Sarana has no effect on the direction of GM i.e., GM and Multistrada Arah go up and down completely randomly.
Pair Corralation between GM and Multistrada Arah
If you would invest 4,829 in General Motors on September 2, 2024 and sell it today you would earn a total of 730.00 from holding General Motors or generate 15.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
General Motors vs. Multistrada Arah Sarana
Performance |
| Timeline |
| General Motors |
| Multistrada Arah Sarana |
GM and Multistrada Arah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Multistrada Arah
The main advantage of trading using opposite GM and Multistrada Arah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Multistrada Arah 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 Multistrada Arah will offset losses from the drop in Multistrada Arah's long position.The idea behind General Motors and Multistrada Arah Sarana 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.| Multistrada Arah vs. Japfa Comfeed Indonesia | Multistrada Arah vs. Charoen Pokphand Indonesia | Multistrada Arah vs. Erajaya Swasembada Tbk | Multistrada Arah vs. Indofood Cbp Sukses |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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