Correlation Between GM and PerkinElmer
Can any of the company-specific risk be diversified away by investing in both GM and PerkinElmer 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 PerkinElmer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and PerkinElmer, you can compare the effects of market volatilities on GM and PerkinElmer 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 PerkinElmer. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and PerkinElmer.
Diversification Opportunities for GM and PerkinElmer
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between GM and PerkinElmer is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and PerkinElmer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PerkinElmer 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 PerkinElmer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PerkinElmer has no effect on the direction of GM i.e., GM and PerkinElmer go up and down completely randomly.
Pair Corralation between GM and PerkinElmer
If you would invest 5,197 in General Motors on August 31, 2024 and sell it today you would earn a total of 353.00 from holding General Motors or generate 6.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
General Motors vs. PerkinElmer
Performance |
| Timeline |
| General Motors |
| PerkinElmer |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and PerkinElmer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and PerkinElmer
The main advantage of trading using opposite GM and PerkinElmer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, PerkinElmer 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 PerkinElmer will offset losses from the drop in PerkinElmer's long position.The idea behind General Motors and PerkinElmer 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.| PerkinElmer vs. Mettler Toledo International | PerkinElmer vs. Waters | PerkinElmer vs. Sotera Health Co | PerkinElmer vs. Charles River Laboratories |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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