Correlation Between GM and Honey Badger
Can any of the company-specific risk be diversified away by investing in both GM and Honey Badger 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 Honey Badger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Honey Badger Silver, you can compare the effects of market volatilities on GM and Honey Badger 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 Honey Badger. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Honey Badger.
Diversification Opportunities for GM and Honey Badger
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Honey is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Honey Badger Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Honey Badger Silver 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 Honey Badger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Honey Badger Silver has no effect on the direction of GM i.e., GM and Honey Badger go up and down completely randomly.
Pair Corralation between GM and Honey Badger
Allowing for the 90-day total investment horizon GM is expected to generate 22.49 times less return on investment than Honey Badger. But when comparing it to its historical volatility, General Motors is 21.56 times less risky than Honey Badger. It trades about 0.05 of its potential returns per unit of risk. Honey Badger Silver is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1.71 in Honey Badger Silver on September 3, 2024 and sell it today you would earn a total of 10.29 from holding Honey Badger Silver or generate 601.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Honey Badger Silver
Performance |
| Timeline |
| General Motors |
| Honey Badger Silver |
GM and Honey Badger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Honey Badger
The main advantage of trading using opposite GM and Honey Badger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Honey Badger 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 Honey Badger will offset losses from the drop in Honey Badger's long position.The idea behind General Motors and Honey Badger Silver 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.| Honey Badger vs. Monarca Minerals | Honey Badger vs. Hawkeye Gold and | Honey Badger vs. CANEX Metals | Honey Badger vs. MAS Gold 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |