Correlation Between GM and Neurobiological Technologies
Can any of the company-specific risk be diversified away by investing in both GM and Neurobiological Technologies 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 Neurobiological Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Neurobiological Technologies, you can compare the effects of market volatilities on GM and Neurobiological Technologies 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 Neurobiological Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Neurobiological Technologies.
Diversification Opportunities for GM and Neurobiological Technologies
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Neurobiological is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Neurobiological Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neurobiological Technologies 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 Neurobiological Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neurobiological Technologies has no effect on the direction of GM i.e., GM and Neurobiological Technologies go up and down completely randomly.
Pair Corralation between GM and Neurobiological Technologies
If you would invest 4,807 in General Motors on August 25, 2024 and sell it today you would earn a total of 1,046 from holding General Motors or generate 21.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 2.22% |
| Values | Daily Returns |
General Motors vs. Neurobiological Technologies
Performance |
| Timeline |
| General Motors |
| Neurobiological Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Neurobiological Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Neurobiological Technologies
The main advantage of trading using opposite GM and Neurobiological Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Neurobiological Technologies 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 Neurobiological Technologies will offset losses from the drop in Neurobiological Technologies' long position.The idea behind General Motors and Neurobiological Technologies 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.| Neurobiological Technologies vs. Pharming Group NV | Neurobiological Technologies vs. Kane Biotech | Neurobiological Technologies vs. Health Sciences Gr | Neurobiological Technologies vs. MedMira |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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