Correlation Between GM and MoneyHero Limited
Can any of the company-specific risk be diversified away by investing in both GM and MoneyHero Limited 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 MoneyHero Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and MoneyHero Limited Class, you can compare the effects of market volatilities on GM and MoneyHero Limited 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 MoneyHero Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and MoneyHero Limited.
Diversification Opportunities for GM and MoneyHero Limited
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and MoneyHero is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and MoneyHero Limited Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MoneyHero Limited Class 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 MoneyHero Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MoneyHero Limited Class has no effect on the direction of GM i.e., GM and MoneyHero Limited go up and down completely randomly.
Pair Corralation between GM and MoneyHero Limited
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.24 times more return on investment than MoneyHero Limited. However, General Motors is 4.12 times less risky than MoneyHero Limited. It trades about 0.05 of its potential returns per unit of risk. MoneyHero Limited Class is currently generating about -0.01 per unit of risk. If you would invest 3,731 in General Motors on August 27, 2024 and sell it today you would earn a total of 2,122 from holding General Motors or generate 56.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. MoneyHero Limited Class
Performance |
| Timeline |
| General Motors |
| MoneyHero Limited Class |
GM and MoneyHero Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and MoneyHero Limited
The main advantage of trading using opposite GM and MoneyHero Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, MoneyHero Limited 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 MoneyHero Limited will offset losses from the drop in MoneyHero Limited's long position.The idea behind General Motors and MoneyHero Limited Class 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.| MoneyHero Limited vs. Diageo PLC ADR | MoneyHero Limited vs. Albertsons Companies | MoneyHero Limited vs. Vita Coco | MoneyHero Limited vs. Keurig Dr Pepper |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |