Correlation Between GM and Partnera Oyj
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By analyzing existing cross correlation between General Motors and Partnera Oyj, you can compare the effects of market volatilities on GM and Partnera Oyj 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 Partnera Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Partnera Oyj.
Diversification Opportunities for GM and Partnera Oyj
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GM and Partnera is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Partnera Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Partnera Oyj 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 Partnera Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Partnera Oyj has no effect on the direction of GM i.e., GM and Partnera Oyj go up and down completely randomly.
Pair Corralation between GM and Partnera Oyj
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.45 times more return on investment than Partnera Oyj. However, General Motors is 2.21 times less risky than Partnera Oyj. It trades about 0.11 of its potential returns per unit of risk. Partnera Oyj is currently generating about 0.04 per unit of risk. If you would invest 4,077 in General Motors on August 27, 2024 and sell it today you would earn a total of 1,776 from holding General Motors or generate 43.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Partnera Oyj
Performance |
| Timeline |
| General Motors |
| Partnera Oyj |
GM and Partnera Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Partnera Oyj
The main advantage of trading using opposite GM and Partnera Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Partnera Oyj 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 Partnera Oyj will offset losses from the drop in Partnera Oyj's long position.The idea behind General Motors and Partnera Oyj 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.| Partnera Oyj vs. Vincit Group Oyj | Partnera Oyj vs. Verkkokauppa Oyj | Partnera Oyj vs. Solteq PLC | Partnera Oyj vs. Tokmanni Group Oyj |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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