Correlation Between GM and Uniqure NV
Can any of the company-specific risk be diversified away by investing in both GM and Uniqure NV 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 Uniqure NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Uniqure NV, you can compare the effects of market volatilities on GM and Uniqure NV 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 Uniqure NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Uniqure NV.
Diversification Opportunities for GM and Uniqure NV
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Uniqure is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Uniqure NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniqure NV 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 Uniqure NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniqure NV has no effect on the direction of GM i.e., GM and Uniqure NV go up and down completely randomly.
Pair Corralation between GM and Uniqure NV
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.44 times more return on investment than Uniqure NV. However, General Motors is 2.25 times less risky than Uniqure NV. It trades about 0.12 of its potential returns per unit of risk. Uniqure NV is currently generating about -0.01 per unit of risk. If you would invest 5,197 in General Motors on August 31, 2024 and sell it today you would earn a total of 362.00 from holding General Motors or generate 6.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Uniqure NV
Performance |
| Timeline |
| General Motors |
| Uniqure NV |
GM and Uniqure NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Uniqure NV
The main advantage of trading using opposite GM and Uniqure NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Uniqure NV 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 Uniqure NV will offset losses from the drop in Uniqure NV's long position.The idea behind General Motors and Uniqure NV 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.| Uniqure NV vs. Rocket Pharmaceuticals | Uniqure NV vs. Rhythm Pharmaceuticals | Uniqure NV vs. Solid Biosciences LLC | Uniqure NV vs. MeiraGTx Holdings PLC |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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