Correlation Between GM and SeqLL Warrant
Can any of the company-specific risk be diversified away by investing in both GM and SeqLL Warrant 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 SeqLL Warrant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and SeqLL Warrant, you can compare the effects of market volatilities on GM and SeqLL Warrant 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 SeqLL Warrant. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and SeqLL Warrant.
Diversification Opportunities for GM and SeqLL Warrant
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and SeqLL is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and SeqLL Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SeqLL 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 SeqLL Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SeqLL Warrant has no effect on the direction of GM i.e., GM and SeqLL Warrant go up and down completely randomly.
Pair Corralation between GM and SeqLL Warrant
Allowing for the 90-day total investment horizon GM is expected to generate 78.54 times less return on investment than SeqLL Warrant. But when comparing it to its historical volatility, General Motors is 23.3 times less risky than SeqLL Warrant. It trades about 0.05 of its potential returns per unit of risk. SeqLL Warrant is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 13.00 in SeqLL Warrant on September 3, 2024 and sell it today you would lose (5.76) from holding SeqLL Warrant or give up 44.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 23.23% |
| Values | Daily Returns |
General Motors vs. SeqLL Warrant
Performance |
| Timeline |
| General Motors |
| SeqLL Warrant |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and SeqLL Warrant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and SeqLL Warrant
The main advantage of trading using opposite GM and SeqLL Warrant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, SeqLL Warrant 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 SeqLL Warrant will offset losses from the drop in SeqLL Warrant's long position.| GM vs. GreenPower Motor | GM vs. ZEEKR Intelligent Technology | GM vs. Volcon Inc | GM vs. ECD Automotive Design |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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