Correlation Between GM and Okapi Resources
Can any of the company-specific risk be diversified away by investing in both GM and Okapi Resources 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 Okapi Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Okapi Resources Limited, you can compare the effects of market volatilities on GM and Okapi Resources 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 Okapi Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Okapi Resources.
Diversification Opportunities for GM and Okapi Resources
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and Okapi is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Okapi Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okapi Resources 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 Okapi Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Okapi Resources has no effect on the direction of GM i.e., GM and Okapi Resources go up and down completely randomly.
Pair Corralation between GM and Okapi Resources
If you would invest 3,292 in General Motors on August 29, 2024 and sell it today you would earn a total of 2,258 from holding General Motors or generate 68.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.32% |
| Values | Daily Returns |
General Motors vs. Okapi Resources Limited
Performance |
| Timeline |
| General Motors |
| Okapi Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Okapi Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Okapi Resources
The main advantage of trading using opposite GM and Okapi Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Okapi Resources 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 Okapi Resources will offset losses from the drop in Okapi Resources' long position.The idea behind General Motors and Okapi Resources Limited 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.| Okapi Resources vs. Blue Sky Uranium | Okapi Resources vs. Purepoint Uranium Group | Okapi Resources vs. Bannerman Resources | Okapi Resources vs. Baselode Energy Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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