Correlation Between GM and Vivid Seats
Can any of the company-specific risk be diversified away by investing in both GM and Vivid Seats 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 Vivid Seats into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Vivid Seats Warrant, you can compare the effects of market volatilities on GM and Vivid Seats 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 Vivid Seats. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Vivid Seats.
Diversification Opportunities for GM and Vivid Seats
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GM and Vivid is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Vivid Seats Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivid Seats Warrant 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 Vivid Seats. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivid Seats Warrant has no effect on the direction of GM i.e., GM and Vivid Seats go up and down completely randomly.
Pair Corralation between GM and Vivid Seats
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.22 times more return on investment than Vivid Seats. However, General Motors is 4.53 times less risky than Vivid Seats. It trades about 0.15 of its potential returns per unit of risk. Vivid Seats Warrant is currently generating about -0.06 per unit of risk. If you would invest 4,648 in General Motors on August 28, 2024 and sell it today you would earn a total of 831.00 from holding General Motors or generate 17.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Vivid Seats Warrant
Performance |
| Timeline |
| General Motors |
| Vivid Seats Warrant |
GM and Vivid Seats Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Vivid Seats
The main advantage of trading using opposite GM and Vivid Seats positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Vivid Seats 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 Vivid Seats will offset losses from the drop in Vivid Seats' long position.The idea behind General Motors and Vivid Seats Warrant 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.| Vivid Seats vs. Trivago NV | Vivid Seats vs. Cheetah Mobile | Vivid Seats vs. Comscore | Vivid Seats vs. Thryv Holdings |
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.
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