Correlation Between GM and ROC Energy
Can any of the company-specific risk be diversified away by investing in both GM and ROC Energy 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 ROC Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and ROC Energy Acquisition, you can compare the effects of market volatilities on GM and ROC Energy 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 ROC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and ROC Energy.
Diversification Opportunities for GM and ROC Energy
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and ROC is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and ROC Energy Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROC Energy Acquisition 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 ROC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROC Energy Acquisition has no effect on the direction of GM i.e., GM and ROC Energy go up and down completely randomly.
Pair Corralation between GM and ROC Energy
If you would invest 5,096 in General Motors on September 2, 2024 and sell it today you would earn a total of 463.00 from holding General Motors or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
General Motors vs. ROC Energy Acquisition
Performance |
| Timeline |
| General Motors |
| ROC Energy Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and ROC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and ROC Energy
The main advantage of trading using opposite GM and ROC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, ROC Energy 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 ROC Energy will offset losses from the drop in ROC Energy's long position.The idea behind General Motors and ROC Energy Acquisition 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.| ROC Energy vs. Canlan Ice Sports | ROC Energy vs. Summa Silver Corp | ROC Energy vs. Harmony Gold Mining | ROC Energy vs. Vindicator Silver Lead Mining |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |