Correlation Between GM and Millennium Silver
Can any of the company-specific risk be diversified away by investing in both GM and Millennium Silver 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 Millennium Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Millennium Silver Corp, you can compare the effects of market volatilities on GM and Millennium Silver 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 Millennium Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Millennium Silver.
Diversification Opportunities for GM and Millennium Silver
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Millennium is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Millennium Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millennium Silver Corp 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 Millennium Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millennium Silver Corp has no effect on the direction of GM i.e., GM and Millennium Silver go up and down completely randomly.
Pair Corralation between GM and Millennium Silver
If you would invest 5,273 in General Motors on August 28, 2024 and sell it today you would earn a total of 747.00 from holding General Motors or generate 14.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
General Motors vs. Millennium Silver Corp
Performance |
| Timeline |
| General Motors |
| Millennium Silver Corp |
GM and Millennium Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Millennium Silver
The main advantage of trading using opposite GM and Millennium Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Millennium Silver 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 Millennium Silver will offset losses from the drop in Millennium Silver's long position.The idea behind General Motors and Millennium Silver Corp 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.| Millennium Silver vs. Highwood Asset Management | Millennium Silver vs. Doman Building Materials | Millennium Silver vs. Verizon Communications CDR | Millennium Silver vs. Data Communications Management |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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