Correlation Between GM and Playlogic Entertainment
Can any of the company-specific risk be diversified away by investing in both GM and Playlogic Entertainment 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 Playlogic Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Playlogic Entertainment, you can compare the effects of market volatilities on GM and Playlogic Entertainment 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 Playlogic Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Playlogic Entertainment.
Diversification Opportunities for GM and Playlogic Entertainment
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Playlogic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Playlogic Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playlogic Entertainment 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 Playlogic Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playlogic Entertainment has no effect on the direction of GM i.e., GM and Playlogic Entertainment go up and down completely randomly.
Pair Corralation between GM and Playlogic Entertainment
If you would invest 5,076 in General Motors on September 1, 2024 and sell it today you would earn a total of 483.00 from holding General Motors or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Playlogic Entertainment
Performance |
| Timeline |
| General Motors |
| Playlogic Entertainment |
GM and Playlogic Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Playlogic Entertainment
The main advantage of trading using opposite GM and Playlogic Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Playlogic Entertainment 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 Playlogic Entertainment will offset losses from the drop in Playlogic Entertainment's long position.The idea behind General Motors and Playlogic Entertainment 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.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..
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