Correlation Between GM and Schroder ImmoPLUS
Can any of the company-specific risk be diversified away by investing in both GM and Schroder ImmoPLUS 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 Schroder ImmoPLUS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Schroder ImmoPLUS, you can compare the effects of market volatilities on GM and Schroder ImmoPLUS 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 Schroder ImmoPLUS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Schroder ImmoPLUS.
Diversification Opportunities for GM and Schroder ImmoPLUS
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GM and Schroder is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Schroder ImmoPLUS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schroder ImmoPLUS 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 Schroder ImmoPLUS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schroder ImmoPLUS has no effect on the direction of GM i.e., GM and Schroder ImmoPLUS go up and down completely randomly.
Pair Corralation between GM and Schroder ImmoPLUS
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.04 times more return on investment than Schroder ImmoPLUS. However, GM is 2.04 times more volatile than Schroder ImmoPLUS. It trades about 0.03 of its potential returns per unit of risk. Schroder ImmoPLUS is currently generating about 0.06 per unit of risk. If you would invest 4,049 in General Motors on November 1, 2024 and sell it today you would earn a total of 929.00 from holding General Motors or generate 22.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
General Motors vs. Schroder ImmoPLUS
Performance |
| Timeline |
| General Motors |
| Schroder ImmoPLUS |
GM and Schroder ImmoPLUS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Schroder ImmoPLUS
The main advantage of trading using opposite GM and Schroder ImmoPLUS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Schroder ImmoPLUS 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 Schroder ImmoPLUS will offset losses from the drop in Schroder ImmoPLUS's long position.The idea behind General Motors and Schroder ImmoPLUS 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.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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |