Correlation Between GM and Psagot Index
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By analyzing existing cross correlation between General Motors and Psagot Index Funds, you can compare the effects of market volatilities on GM and Psagot Index 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 Psagot Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Psagot Index.
Diversification Opportunities for GM and Psagot Index
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Psagot is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Psagot Index Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Psagot Index Funds 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 Psagot Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Psagot Index Funds has no effect on the direction of GM i.e., GM and Psagot Index go up and down completely randomly.
Pair Corralation between GM and Psagot Index
Allowing for the 90-day total investment horizon General Motors is expected to generate 6.87 times more return on investment than Psagot Index. However, GM is 6.87 times more volatile than Psagot Index Funds. It trades about 0.1 of its potential returns per unit of risk. Psagot Index Funds is currently generating about 0.17 per unit of risk. If you would invest 3,114 in General Motors on September 4, 2024 and sell it today you would earn a total of 2,390 from holding General Motors or generate 76.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 77.24% |
| Values | Daily Returns |
General Motors vs. Psagot Index Funds
Performance |
| Timeline |
| General Motors |
| Psagot Index Funds |
GM and Psagot Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Psagot Index
The main advantage of trading using opposite GM and Psagot Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Psagot Index 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 Psagot Index will offset losses from the drop in Psagot Index's long position.The idea behind General Motors and Psagot Index Funds 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.| Psagot Index vs. Psagot Index Funds | Psagot Index vs. Psagot Index Funds | Psagot Index vs. Psagot Index Funds | Psagot Index vs. Psagot Index Funds |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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