Correlation Between GM and Mind Cure
Can any of the company-specific risk be diversified away by investing in both GM and Mind Cure 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 Mind Cure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Mind Cure Health, you can compare the effects of market volatilities on GM and Mind Cure 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 Mind Cure. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Mind Cure.
Diversification Opportunities for GM and Mind Cure
Pay attention - limited upside
The 3 months correlation between GM and Mind is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Mind Cure Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mind Cure Health 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 Mind Cure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mind Cure Health has no effect on the direction of GM i.e., GM and Mind Cure go up and down completely randomly.
Pair Corralation between GM and Mind Cure
If you would invest 3,324 in General Motors on September 2, 2024 and sell it today you would earn a total of 2,235 from holding General Motors or generate 67.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
General Motors vs. Mind Cure Health
Performance |
| Timeline |
| General Motors |
| Mind Cure Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Mind Cure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Mind Cure
The main advantage of trading using opposite GM and Mind Cure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Mind Cure 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 Mind Cure will offset losses from the drop in Mind Cure's long position.The idea behind General Motors and Mind Cure Health 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.| Mind Cure vs. Surrozen Warrant | Mind Cure vs. Jasper Therapeutics | Mind Cure vs. Revelation Biosciences | Mind Cure vs. Wesana Health Holdings |
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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