Correlation Between GM and Mydas Real
Can any of the company-specific risk be diversified away by investing in both GM and Mydas Real 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 Mydas Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Mydas Real Estate, you can compare the effects of market volatilities on GM and Mydas Real 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 Mydas Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Mydas Real.
Diversification Opportunities for GM and Mydas Real
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GM and Mydas is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Mydas Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mydas Real Estate 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 Mydas Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mydas Real Estate has no effect on the direction of GM i.e., GM and Mydas Real go up and down completely randomly.
Pair Corralation between GM and Mydas Real
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.77 times more return on investment than Mydas Real. However, General Motors is 1.29 times less risky than Mydas Real. It trades about 0.17 of its potential returns per unit of risk. Mydas Real Estate is currently generating about -0.02 per unit of risk. If you would invest 5,076 in General Motors on September 1, 2024 and sell it today you would earn a total of 483.00 from holding General Motors or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
General Motors vs. Mydas Real Estate
Performance |
| Timeline |
| General Motors |
| Mydas Real Estate |
GM and Mydas Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Mydas Real
The main advantage of trading using opposite GM and Mydas Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Mydas Real 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 Mydas Real will offset losses from the drop in Mydas Real's long position.The idea behind General Motors and Mydas Real Estate 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.| Mydas Real vs. Fattal 1998 Holdings | Mydas Real vs. Azrieli Group | Mydas Real vs. Clal Insurance Enterprises |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |