Correlation Between GM and Uniroyal Global
Can any of the company-specific risk be diversified away by investing in both GM and Uniroyal Global 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 Uniroyal Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Uniroyal Global Engineered, you can compare the effects of market volatilities on GM and Uniroyal Global 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 Uniroyal Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Uniroyal Global.
Diversification Opportunities for GM and Uniroyal Global
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Uniroyal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Uniroyal Global Engineered in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniroyal Global Engi 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 Uniroyal Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniroyal Global Engi has no effect on the direction of GM i.e., GM and Uniroyal Global go up and down completely randomly.
Pair Corralation between GM and Uniroyal Global
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 | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
General Motors vs. Uniroyal Global Engineered
Performance |
| Timeline |
| General Motors |
| Uniroyal Global Engi |
GM and Uniroyal Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Uniroyal Global
The main advantage of trading using opposite GM and Uniroyal Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Uniroyal Global 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 Uniroyal Global will offset losses from the drop in Uniroyal Global's long position.The idea behind General Motors and Uniroyal Global Engineered 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.| Uniroyal Global vs. Porsche Automobile Holding | Uniroyal Global vs. Ferrari NV | Uniroyal Global vs. Toyota Motor | Uniroyal Global vs. General Motors |
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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