Correlation Between GM and Ambrus Tax
Can any of the company-specific risk be diversified away by investing in both GM and Ambrus Tax 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 Ambrus Tax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Ambrus Tax Conscious, you can compare the effects of market volatilities on GM and Ambrus Tax 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 Ambrus Tax. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Ambrus Tax.
Diversification Opportunities for GM and Ambrus Tax
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GM and Ambrus is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Ambrus Tax Conscious in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambrus Tax Conscious 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 Ambrus Tax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambrus Tax Conscious has no effect on the direction of GM i.e., GM and Ambrus Tax go up and down completely randomly.
Pair Corralation between GM and Ambrus Tax
Allowing for the 90-day total investment horizon General Motors is expected to generate 13.55 times more return on investment than Ambrus Tax. However, GM is 13.55 times more volatile than Ambrus Tax Conscious. It trades about 0.16 of its potential returns per unit of risk. Ambrus Tax Conscious is currently generating about 0.2 per unit of risk. If you would invest 5,096 in General Motors on September 2, 2024 and sell it today you would earn a total of 463.00 from holding General Motors or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Ambrus Tax Conscious
Performance |
| Timeline |
| General Motors |
| Ambrus Tax Conscious |
GM and Ambrus Tax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Ambrus Tax
The main advantage of trading using opposite GM and Ambrus Tax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Ambrus Tax 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 Ambrus Tax will offset losses from the drop in Ambrus Tax's long position.The idea behind General Motors and Ambrus Tax Conscious 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.| Ambrus Tax vs. Ambrus Core Bond | Ambrus Tax vs. Ambrus Tax Conscious | Ambrus Tax vs. State Street Target | Ambrus Tax vs. Ab Centrated Growth |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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