Correlation Between GM and Pinnacle Bancshares
Can any of the company-specific risk be diversified away by investing in both GM and Pinnacle Bancshares 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 Pinnacle Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Pinnacle Bancshares, you can compare the effects of market volatilities on GM and Pinnacle Bancshares 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 Pinnacle Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Pinnacle Bancshares.
Diversification Opportunities for GM and Pinnacle Bancshares
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and Pinnacle is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Pinnacle Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinnacle Bancshares 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 Pinnacle Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinnacle Bancshares has no effect on the direction of GM i.e., GM and Pinnacle Bancshares go up and down completely randomly.
Pair Corralation between GM and Pinnacle Bancshares
If you would invest 4,044 in General Motors on September 1, 2024 and sell it today you would earn a total of 1,515 from holding General Motors or generate 37.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.53% |
| Values | Daily Returns |
General Motors vs. Pinnacle Bancshares
Performance |
| Timeline |
| General Motors |
| Pinnacle Bancshares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Pinnacle Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Pinnacle Bancshares
The main advantage of trading using opposite GM and Pinnacle Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Pinnacle Bancshares 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 Pinnacle Bancshares will offset losses from the drop in Pinnacle Bancshares' long position.The idea behind General Motors and Pinnacle Bancshares 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.| Pinnacle Bancshares vs. Eastern Michigan Financial | Pinnacle Bancshares vs. Commercial National Financial | Pinnacle Bancshares vs. Mifflinburg Bancorp | Pinnacle Bancshares vs. Apollo Bancorp |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |