Correlation Between GM and Planet 13
Can any of the company-specific risk be diversified away by investing in both GM and Planet 13 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 Planet 13 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Planet 13 Holdings, you can compare the effects of market volatilities on GM and Planet 13 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 Planet 13. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Planet 13.
Diversification Opportunities for GM and Planet 13
Pay attention - limited upside
The 3 months correlation between GM and Planet is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Planet 13 Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet 13 Holdings 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 Planet 13. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet 13 Holdings has no effect on the direction of GM i.e., GM and Planet 13 go up and down completely randomly.
Pair Corralation between GM and Planet 13
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.47 times more return on investment than Planet 13. However, General Motors is 2.13 times less risky than Planet 13. It trades about -0.14 of its potential returns per unit of risk. Planet 13 Holdings is currently generating about -0.08 per unit of risk. If you would invest 5,753 in General Motors on September 12, 2024 and sell it today you would lose (479.00) from holding General Motors or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Planet 13 Holdings
Performance |
| Timeline |
| General Motors |
| Planet 13 Holdings |
GM and Planet 13 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Planet 13
The main advantage of trading using opposite GM and Planet 13 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Planet 13 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 Planet 13 will offset losses from the drop in Planet 13's long position.The idea behind General Motors and Planet 13 Holdings 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.| Planet 13 vs. Skechers USA | Planet 13 vs. Mediag3 | Planet 13 vs. Procter Gamble | Planet 13 vs. Steven Madden |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |