Correlation Between GM and Peakstone Realty
Can any of the company-specific risk be diversified away by investing in both GM and Peakstone Realty 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 Peakstone Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Peakstone Realty Trust, you can compare the effects of market volatilities on GM and Peakstone Realty 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 Peakstone Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Peakstone Realty.
Diversification Opportunities for GM and Peakstone Realty
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and Peakstone is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Peakstone Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peakstone Realty Trust 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 Peakstone Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peakstone Realty Trust has no effect on the direction of GM i.e., GM and Peakstone Realty go up and down completely randomly.
Pair Corralation between GM and Peakstone Realty
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.89 times more return on investment than Peakstone Realty. However, General Motors is 1.12 times less risky than Peakstone Realty. It trades about 0.14 of its potential returns per unit of risk. Peakstone Realty Trust is currently generating about -0.11 per unit of risk. If you would invest 5,292 in General Motors on August 24, 2024 and sell it today you would earn a total of 276.00 from holding General Motors or generate 5.22% 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. Peakstone Realty Trust
Performance |
| Timeline |
| General Motors |
| Peakstone Realty Trust |
GM and Peakstone Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Peakstone Realty
The main advantage of trading using opposite GM and Peakstone Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Peakstone Realty 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 Peakstone Realty will offset losses from the drop in Peakstone Realty's long position.The idea behind General Motors and Peakstone Realty Trust 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.| Peakstone Realty vs. Global Net Lease, | Peakstone Realty vs. Gladstone Commercial | Peakstone Realty vs. CTO Realty Growth | Peakstone Realty vs. W P Carey |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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