Correlation Between GM and Pioneer Solutions
Can any of the company-specific risk be diversified away by investing in both GM and Pioneer Solutions 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 Pioneer Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Pioneer Solutions , you can compare the effects of market volatilities on GM and Pioneer Solutions 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 Pioneer Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Pioneer Solutions.
Diversification Opportunities for GM and Pioneer Solutions
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GM and Pioneer is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Pioneer Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Solutions 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 Pioneer Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Solutions has no effect on the direction of GM i.e., GM and Pioneer Solutions go up and down completely randomly.
Pair Corralation between GM and Pioneer Solutions
Allowing for the 90-day total investment horizon General Motors is expected to generate 5.04 times more return on investment than Pioneer Solutions. However, GM is 5.04 times more volatile than Pioneer Solutions . It trades about 0.05 of its potential returns per unit of risk. Pioneer Solutions is currently generating about 0.1 per unit of risk. If you would invest 3,805 in General Motors on September 3, 2024 and sell it today you would earn a total of 1,754 from holding General Motors or generate 46.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Pioneer Solutions
Performance |
| Timeline |
| General Motors |
| Pioneer Solutions |
GM and Pioneer Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Pioneer Solutions
The main advantage of trading using opposite GM and Pioneer Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Pioneer Solutions 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 Pioneer Solutions will offset losses from the drop in Pioneer Solutions' long position.The idea behind General Motors and Pioneer Solutions 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.| Pioneer Solutions vs. Blackrock Gbl Alloc | Pioneer Solutions vs. Ivy Asset Strategy | Pioneer Solutions vs. Fpa Crescent Fund | Pioneer Solutions vs. Templeton Global Bond |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |