Correlation Between GM and TECO ENERGY
Can any of the company-specific risk be diversified away by investing in both GM and TECO ENERGY 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 TECO ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and TECO ENERGY INC, you can compare the effects of market volatilities on GM and TECO ENERGY 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 TECO ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and TECO ENERGY.
Diversification Opportunities for GM and TECO ENERGY
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and TECO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and TECO ENERGY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TECO ENERGY INC 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 TECO ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TECO ENERGY INC has no effect on the direction of GM i.e., GM and TECO ENERGY go up and down completely randomly.
Pair Corralation between GM and TECO ENERGY
If you would invest 3,550 in General Motors on September 14, 2024 and sell it today you would earn a total of 1,710 from holding General Motors or generate 48.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
General Motors vs. TECO ENERGY INC
Performance |
| Timeline |
| General Motors |
| TECO ENERGY INC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and TECO ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and TECO ENERGY
The main advantage of trading using opposite GM and TECO ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, TECO ENERGY 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 TECO ENERGY will offset losses from the drop in TECO ENERGY's long position.The idea behind General Motors and TECO ENERGY INC 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.| TECO ENERGY vs. CECO Environmental Corp | TECO ENERGY vs. Meli Hotels International | TECO ENERGY vs. Summit Hotel Properties | TECO ENERGY vs. Forsys Metals Corp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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