Correlation Between GM and Msvif Emerging
Can any of the company-specific risk be diversified away by investing in both GM and Msvif Emerging 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 Msvif Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Msvif Emerging Mkts, you can compare the effects of market volatilities on GM and Msvif Emerging 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 Msvif Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Msvif Emerging.
Diversification Opportunities for GM and Msvif Emerging
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GM and Msvif is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Msvif Emerging Mkts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Msvif Emerging Mkts 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 Msvif Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Msvif Emerging Mkts has no effect on the direction of GM i.e., GM and Msvif Emerging go up and down completely randomly.
Pair Corralation between GM and Msvif Emerging
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Msvif Emerging. In addition to that, GM is 2.05 times more volatile than Msvif Emerging Mkts. It trades about -0.09 of its total potential returns per unit of risk. Msvif Emerging Mkts is currently generating about 0.23 per unit of volatility. If you would invest 1,375 in Msvif Emerging Mkts on November 29, 2024 and sell it today you would earn a total of 51.00 from holding Msvif Emerging Mkts or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Msvif Emerging Mkts
Performance |
| Timeline |
| General Motors |
| Msvif Emerging Mkts |
GM and Msvif Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Msvif Emerging
The main advantage of trading using opposite GM and Msvif Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Msvif Emerging 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 Msvif Emerging will offset losses from the drop in Msvif Emerging's long position.The idea behind General Motors and Msvif Emerging Mkts 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.| Msvif Emerging vs. Pgim Jennison Technology | Msvif Emerging vs. Baron Select Funds | Msvif Emerging vs. Science Technology Fund | Msvif Emerging vs. T Rowe Price |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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