Correlation Between GM and SurgePays Warrant
Can any of the company-specific risk be diversified away by investing in both GM and SurgePays 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 SurgePays 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 SurgePays Warrant, you can compare the effects of market volatilities on GM and SurgePays 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 SurgePays Warrant. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and SurgePays Warrant.
Diversification Opportunities for GM and SurgePays Warrant
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GM and SurgePays is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and SurgePays Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SurgePays 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 SurgePays Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SurgePays Warrant has no effect on the direction of GM i.e., GM and SurgePays Warrant go up and down completely randomly.
Pair Corralation between GM and SurgePays Warrant
Allowing for the 90-day total investment horizon GM is expected to generate 67.74 times less return on investment than SurgePays Warrant. But when comparing it to its historical volatility, General Motors is 40.3 times less risky than SurgePays Warrant. It trades about 0.05 of its potential returns per unit of risk. SurgePays Warrant is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 305.00 in SurgePays Warrant on August 29, 2024 and sell it today you would lose (304.13) from holding SurgePays Warrant or give up 99.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.93% |
| Values | Daily Returns |
General Motors vs. SurgePays Warrant
Performance |
| Timeline |
| General Motors |
| SurgePays Warrant |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
GM and SurgePays Warrant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and SurgePays Warrant
The main advantage of trading using opposite GM and SurgePays Warrant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, SurgePays 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 SurgePays Warrant will offset losses from the drop in SurgePays Warrant's long position.The idea behind General Motors and SurgePays 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.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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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