Correlation Between GM and OZ Minerals
Can any of the company-specific risk be diversified away by investing in both GM and OZ Minerals 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 OZ Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and OZ Minerals Limited, you can compare the effects of market volatilities on GM and OZ Minerals 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 OZ Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and OZ Minerals.
Diversification Opportunities for GM and OZ Minerals
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GM and OZMLF is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and OZ Minerals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OZ Minerals Limited 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 OZ Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OZ Minerals Limited has no effect on the direction of GM i.e., GM and OZ Minerals go up and down completely randomly.
Pair Corralation between GM and OZ Minerals
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 | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
General Motors vs. OZ Minerals Limited
Performance |
| Timeline |
| General Motors |
| OZ Minerals Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and OZ Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and OZ Minerals
The main advantage of trading using opposite GM and OZ Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, OZ Minerals 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 OZ Minerals will offset losses from the drop in OZ Minerals' long position.The idea behind General Motors and OZ Minerals 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.| OZ Minerals vs. NETGEAR | OZ Minerals vs. Playtika Holding Corp | OZ Minerals vs. Getty Images Holdings | OZ Minerals vs. Dave Busters Entertainment |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |