Correlation Between GM and Nicolas Correa
Can any of the company-specific risk be diversified away by investing in both GM and Nicolas Correa 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 Nicolas Correa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Nicolas Correa SA, you can compare the effects of market volatilities on GM and Nicolas Correa 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 Nicolas Correa. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Nicolas Correa.
Diversification Opportunities for GM and Nicolas Correa
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between GM and Nicolas is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Nicolas Correa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicolas Correa SA 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 Nicolas Correa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nicolas Correa SA has no effect on the direction of GM i.e., GM and Nicolas Correa go up and down completely randomly.
Pair Corralation between GM and Nicolas Correa
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.89 times more return on investment than Nicolas Correa. However, GM is 1.89 times more volatile than Nicolas Correa SA. It trades about 0.17 of its potential returns per unit of risk. Nicolas Correa SA is currently generating about 0.04 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 Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
General Motors vs. Nicolas Correa SA
Performance |
| Timeline |
| General Motors |
| Nicolas Correa SA |
GM and Nicolas Correa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Nicolas Correa
The main advantage of trading using opposite GM and Nicolas Correa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Nicolas Correa 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 Nicolas Correa will offset losses from the drop in Nicolas Correa's long position.The idea behind General Motors and Nicolas Correa SA 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.| Nicolas Correa vs. Arrienda Rental Properties | Nicolas Correa vs. Atresmedia Corporacin de | Nicolas Correa vs. Vytrus Biotech SA | Nicolas Correa vs. Melia Hotels |
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.
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