Correlation Between GM and SUMMARECON AGUNG
Can any of the company-specific risk be diversified away by investing in both GM and SUMMARECON AGUNG 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 SUMMARECON AGUNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and SUMMARECON AGUNG, you can compare the effects of market volatilities on GM and SUMMARECON AGUNG 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 SUMMARECON AGUNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and SUMMARECON AGUNG.
Diversification Opportunities for GM and SUMMARECON AGUNG
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GM and SUMMARECON is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and SUMMARECON AGUNG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUMMARECON AGUNG 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 SUMMARECON AGUNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUMMARECON AGUNG has no effect on the direction of GM i.e., GM and SUMMARECON AGUNG go up and down completely randomly.
Pair Corralation between GM and SUMMARECON AGUNG
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the SUMMARECON AGUNG. But the stock apears to be less risky and, when comparing its historical volatility, General Motors is 6.71 times less risky than SUMMARECON AGUNG. The stock trades about -0.16 of its potential returns per unit of risk. The SUMMARECON AGUNG is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2.40 in SUMMARECON AGUNG on September 14, 2024 and sell it today you would lose (0.20) from holding SUMMARECON AGUNG or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
General Motors vs. SUMMARECON AGUNG
Performance |
| Timeline |
| General Motors |
| SUMMARECON AGUNG |
GM and SUMMARECON AGUNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and SUMMARECON AGUNG
The main advantage of trading using opposite GM and SUMMARECON AGUNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, SUMMARECON AGUNG 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 SUMMARECON AGUNG will offset losses from the drop in SUMMARECON AGUNG's long position.The idea behind General Motors and SUMMARECON AGUNG 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.| SUMMARECON AGUNG vs. BORR DRILLING NEW | SUMMARECON AGUNG vs. PRECISION DRILLING P | SUMMARECON AGUNG vs. SHIP HEALTHCARE HLDGINC | SUMMARECON AGUNG vs. CHINA TONTINE WINES |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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