Correlation Between GM and Omni Financial
Can any of the company-specific risk be diversified away by investing in both GM and Omni Financial 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 Omni Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Omni Financial Services, you can compare the effects of market volatilities on GM and Omni Financial 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 Omni Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Omni Financial.
Diversification Opportunities for GM and Omni Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Omni is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Omni Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omni Financial Services 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 Omni Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omni Financial Services has no effect on the direction of GM i.e., GM and Omni Financial go up and down completely randomly.
Pair Corralation between GM and Omni Financial
If you would invest 0.01 in Omni Financial Services on September 20, 2024 and sell it today you would earn a total of 0.00 from holding Omni Financial Services or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
General Motors vs. Omni Financial Services
Performance |
| Timeline |
| General Motors |
| Omni Financial Services |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Omni Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Omni Financial
The main advantage of trading using opposite GM and Omni Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Omni Financial 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 Omni Financial will offset losses from the drop in Omni Financial's long position.The idea behind General Motors and Omni Financial Services 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.| Omni Financial vs. Brunswick | Omni Financial vs. BRP Inc | Omni Financial vs. Emerson Radio | Omni Financial vs. Playtech plc |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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