Correlation Between GM and Sonasoft Corp
Can any of the company-specific risk be diversified away by investing in both GM and Sonasoft Corp 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 Sonasoft Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Sonasoft Corp, you can compare the effects of market volatilities on GM and Sonasoft Corp 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 Sonasoft Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Sonasoft Corp.
Diversification Opportunities for GM and Sonasoft Corp
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Sonasoft is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Sonasoft Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonasoft Corp 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 Sonasoft Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonasoft Corp has no effect on the direction of GM i.e., GM and Sonasoft Corp go up and down completely randomly.
Pair Corralation between GM and Sonasoft Corp
Allowing for the 90-day total investment horizon GM is expected to generate 21.78 times less return on investment than Sonasoft Corp. But when comparing it to its historical volatility, General Motors is 14.73 times less risky than Sonasoft Corp. It trades about 0.05 of its potential returns per unit of risk. Sonasoft Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2.51 in Sonasoft Corp on September 3, 2024 and sell it today you would lose (2.33) from holding Sonasoft Corp or give up 92.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 24.85% |
| Values | Daily Returns |
General Motors vs. Sonasoft Corp
Performance |
| Timeline |
| General Motors |
| Sonasoft Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Sonasoft Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Sonasoft Corp
The main advantage of trading using opposite GM and Sonasoft Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Sonasoft Corp 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 Sonasoft Corp will offset losses from the drop in Sonasoft Corp's long position.The idea behind General Motors and Sonasoft Corp 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.| Sonasoft Corp vs. Xalles Holdings | Sonasoft Corp vs. Global Develpmts | Sonasoft Corp vs. High Wire Networks | Sonasoft Corp vs. Alternet Systems |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |