Correlation Between GM and Grupo Posadas
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By analyzing existing cross correlation between General Motors and Grupo Posadas SAB, you can compare the effects of market volatilities on GM and Grupo Posadas 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 Grupo Posadas. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Grupo Posadas.
Diversification Opportunities for GM and Grupo Posadas
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Grupo is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Grupo Posadas SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Posadas SAB 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 Grupo Posadas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Posadas SAB has no effect on the direction of GM i.e., GM and Grupo Posadas go up and down completely randomly.
Pair Corralation between GM and Grupo Posadas
Allowing for the 90-day total investment horizon General Motors is expected to generate 3.36 times more return on investment than Grupo Posadas. However, GM is 3.36 times more volatile than Grupo Posadas SAB. It trades about 0.07 of its potential returns per unit of risk. Grupo Posadas SAB is currently generating about -0.14 per unit of risk. If you would invest 4,561 in General Motors on September 5, 2024 and sell it today you would earn a total of 805.00 from holding General Motors or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Grupo Posadas SAB
Performance |
| Timeline |
| General Motors |
| Grupo Posadas SAB |
GM and Grupo Posadas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Grupo Posadas
The main advantage of trading using opposite GM and Grupo Posadas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Grupo Posadas 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 Grupo Posadas will offset losses from the drop in Grupo Posadas' long position.The idea behind General Motors and Grupo Posadas SAB 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.| Grupo Posadas vs. Axtel SAB de | Grupo Posadas vs. Fomento Econmico Mexicano | Grupo Posadas vs. Lloyds Banking Group | Grupo Posadas vs. Apple Inc |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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