Correlation Between GM and Silver Bullion
Can any of the company-specific risk be diversified away by investing in both GM and Silver Bullion 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 Silver Bullion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Silver Bullion Trust, you can compare the effects of market volatilities on GM and Silver Bullion 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 Silver Bullion. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Silver Bullion.
Diversification Opportunities for GM and Silver Bullion
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between GM and Silver is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Silver Bullion Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Bullion Trust 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 Silver Bullion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Bullion Trust has no effect on the direction of GM i.e., GM and Silver Bullion go up and down completely randomly.
Pair Corralation between GM and Silver Bullion
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Silver Bullion. In addition to that, GM is 1.69 times more volatile than Silver Bullion Trust. It trades about -0.14 of its total potential returns per unit of risk. Silver Bullion Trust is currently generating about 0.06 per unit of volatility. If you would invest 1,644 in Silver Bullion Trust on September 12, 2024 and sell it today you would earn a total of 27.00 from holding Silver Bullion Trust or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Silver Bullion Trust
Performance |
| Timeline |
| General Motors |
| Silver Bullion Trust |
GM and Silver Bullion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Silver Bullion
The main advantage of trading using opposite GM and Silver Bullion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Silver Bullion 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 Silver Bullion will offset losses from the drop in Silver Bullion's long position.The idea behind General Motors and Silver Bullion Trust 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.| Silver Bullion vs. Purpose Gold Bullion | Silver Bullion vs. iShares Silver Bullion | Silver Bullion vs. Purpose Diversified Real | Silver Bullion vs. Purpose Premium Yield |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |