Correlation Between GM and Mincor Resources
Can any of the company-specific risk be diversified away by investing in both GM and Mincor Resources 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 Mincor Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Mincor Resources NL, you can compare the effects of market volatilities on GM and Mincor Resources 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 Mincor Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Mincor Resources.
Diversification Opportunities for GM and Mincor Resources
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GM and Mincor is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Mincor Resources NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mincor Resources 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 Mincor Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mincor Resources has no effect on the direction of GM i.e., GM and Mincor Resources go up and down completely randomly.
Pair Corralation between GM and Mincor Resources
If you would invest 4,044 in General Motors on September 1, 2024 and sell it today you would earn a total of 1,515 from holding General Motors or generate 37.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.53% |
| Values | Daily Returns |
General Motors vs. Mincor Resources NL
Performance |
| Timeline |
| General Motors |
| Mincor Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Mincor Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Mincor Resources
The main advantage of trading using opposite GM and Mincor Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Mincor Resources 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 Mincor Resources will offset losses from the drop in Mincor Resources' long position.The idea behind General Motors and Mincor Resources NL 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.| Mincor Resources vs. Centaurus Metals Limited | Mincor Resources vs. Ardea Resources Limited | Mincor Resources vs. Cobalt Blue Holdings | Mincor Resources vs. Champion Bear Resources |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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