Correlation Between GM and PAVmed Series
Can any of the company-specific risk be diversified away by investing in both GM and PAVmed Series 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 PAVmed Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and PAVmed Series Z, you can compare the effects of market volatilities on GM and PAVmed Series 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 PAVmed Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and PAVmed Series.
Diversification Opportunities for GM and PAVmed Series
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and PAVmed is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and PAVmed Series Z in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAVmed Series Z 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 PAVmed Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAVmed Series Z has no effect on the direction of GM i.e., GM and PAVmed Series go up and down completely randomly.
Pair Corralation between GM and PAVmed Series
Allowing for the 90-day total investment horizon GM is expected to generate 286.79 times less return on investment than PAVmed Series. But when comparing it to its historical volatility, General Motors is 96.0 times less risky than PAVmed Series. It trades about 0.08 of its potential returns per unit of risk. PAVmed Series Z is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 4.02 in PAVmed Series Z on August 29, 2024 and sell it today you would lose (2.52) from holding PAVmed Series Z or give up 62.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 49.6% |
| Values | Daily Returns |
General Motors vs. PAVmed Series Z
Performance |
| Timeline |
| General Motors |
| PAVmed Series Z |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
GM and PAVmed Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and PAVmed Series
The main advantage of trading using opposite GM and PAVmed Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, PAVmed Series 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 PAVmed Series will offset losses from the drop in PAVmed Series' long position.The idea behind General Motors and PAVmed Series Z 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.| PAVmed Series vs. China Aircraft Leasing | PAVmed Series vs. Encore Capital Group | PAVmed Series vs. Univest Pennsylvania | PAVmed Series vs. Barings BDC |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |