Correlation Between GM and Mainz Biomed
Can any of the company-specific risk be diversified away by investing in both GM and Mainz Biomed 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 Mainz Biomed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Mainz Biomed BV, you can compare the effects of market volatilities on GM and Mainz Biomed 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 Mainz Biomed. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Mainz Biomed.
Diversification Opportunities for GM and Mainz Biomed
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GM and Mainz is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Mainz Biomed BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainz Biomed BV 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 Mainz Biomed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainz Biomed BV has no effect on the direction of GM i.e., GM and Mainz Biomed go up and down completely randomly.
Pair Corralation between GM and Mainz Biomed
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Mainz Biomed. But the stock apears to be less risky and, when comparing its historical volatility, General Motors is 4.71 times less risky than Mainz Biomed. The stock trades about -0.01 of its potential returns per unit of risk. The Mainz Biomed BV is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 534.00 in Mainz Biomed BV on December 1, 2024 and sell it today you would lose (11.00) from holding Mainz Biomed BV or give up 2.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Mainz Biomed BV
Performance |
| Timeline |
| General Motors |
| Mainz Biomed BV |
GM and Mainz Biomed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Mainz Biomed
The main advantage of trading using opposite GM and Mainz Biomed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Mainz Biomed 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 Mainz Biomed will offset losses from the drop in Mainz Biomed's long position.The idea behind General Motors and Mainz Biomed BV 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.| Mainz Biomed vs. Applied DNA Sciences | Mainz Biomed vs. Neuronetics | Mainz Biomed vs. Prenetics Global | Mainz Biomed vs. Fonar |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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