Correlation Between GM and Hospital Mater
Can any of the company-specific risk be diversified away by investing in both GM and Hospital Mater 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 Hospital Mater into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Hospital Mater Dei, you can compare the effects of market volatilities on GM and Hospital Mater 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 Hospital Mater. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Hospital Mater.
Diversification Opportunities for GM and Hospital Mater
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GM and Hospital is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Hospital Mater Dei in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hospital Mater Dei 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 Hospital Mater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hospital Mater Dei has no effect on the direction of GM i.e., GM and Hospital Mater go up and down completely randomly.
Pair Corralation between GM and Hospital Mater
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.8 times more return on investment than Hospital Mater. However, General Motors is 1.25 times less risky than Hospital Mater. It trades about 0.07 of its potential returns per unit of risk. Hospital Mater Dei is currently generating about -0.08 per unit of risk. If you would invest 3,617 in General Motors on September 2, 2024 and sell it today you would earn a total of 1,942 from holding General Motors or generate 53.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.94% |
| Values | Daily Returns |
General Motors vs. Hospital Mater Dei
Performance |
| Timeline |
| General Motors |
| Hospital Mater Dei |
GM and Hospital Mater Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Hospital Mater
The main advantage of trading using opposite GM and Hospital Mater positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Hospital Mater 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 Hospital Mater will offset losses from the drop in Hospital Mater's long position.The idea behind General Motors and Hospital Mater Dei 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.| Hospital Mater vs. CVS Health | Hospital Mater vs. Healthpeak Properties | Hospital Mater vs. Verizon Communications | Hospital Mater vs. Zoom Video Communications |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |