Correlation Between GM and PepperLime Health
Can any of the company-specific risk be diversified away by investing in both GM and PepperLime Health 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 PepperLime Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and PepperLime Health Acquisition, you can compare the effects of market volatilities on GM and PepperLime Health 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 PepperLime Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and PepperLime Health.
Diversification Opportunities for GM and PepperLime Health
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and PepperLime is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and PepperLime Health Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PepperLime Health 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 PepperLime Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PepperLime Health has no effect on the direction of GM i.e., GM and PepperLime Health go up and down completely randomly.
Pair Corralation between GM and PepperLime Health
Allowing for the 90-day total investment horizon General Motors is expected to generate 7.91 times more return on investment than PepperLime Health. However, GM is 7.91 times more volatile than PepperLime Health Acquisition. It trades about 0.05 of its potential returns per unit of risk. PepperLime Health Acquisition is currently generating about 0.08 per unit of risk. If you would invest 3,585 in General Motors on October 7, 2024 and sell it today you would earn a total of 1,592 from holding General Motors or generate 44.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 26.21% |
| Values | Daily Returns |
General Motors vs. PepperLime Health Acquisition
Performance |
| Timeline |
| General Motors |
| PepperLime Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and PepperLime Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and PepperLime Health
The main advantage of trading using opposite GM and PepperLime Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, PepperLime Health 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 PepperLime Health will offset losses from the drop in PepperLime Health's long position.The idea behind General Motors and PepperLime Health Acquisition 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.| PepperLime Health vs. Hudson Acquisition I | PepperLime Health vs. Alpha One | PepperLime Health vs. Manaris Corp | PepperLime Health vs. Marblegate Acquisition 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 CEOs Directory module to screen CEOs from public companies around the world.
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