Correlation Between GM and Upsales Technology
Can any of the company-specific risk be diversified away by investing in both GM and Upsales Technology 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 Upsales Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Upsales Technology AB, you can compare the effects of market volatilities on GM and Upsales Technology 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 Upsales Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Upsales Technology.
Diversification Opportunities for GM and Upsales Technology
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Upsales is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Upsales Technology AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upsales Technology 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 Upsales Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upsales Technology has no effect on the direction of GM i.e., GM and Upsales Technology go up and down completely randomly.
Pair Corralation between GM and Upsales Technology
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.09 times more return on investment than Upsales Technology. However, GM is 1.09 times more volatile than Upsales Technology AB. It trades about 0.07 of its potential returns per unit of risk. Upsales Technology AB is currently generating about -0.13 per unit of risk. If you would invest 5,273 in General Motors on August 29, 2024 and sell it today you would earn a total of 206.00 from holding General Motors or generate 3.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Upsales Technology AB
Performance |
| Timeline |
| General Motors |
| Upsales Technology |
GM and Upsales Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Upsales Technology
The main advantage of trading using opposite GM and Upsales Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Upsales Technology 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 Upsales Technology will offset losses from the drop in Upsales Technology's long position.The idea behind General Motors and Upsales Technology AB 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.| Upsales Technology vs. Lime Technologies AB | Upsales Technology vs. FormPipe Software AB | Upsales Technology vs. Surgical Science Sweden | Upsales Technology vs. Vitec Software Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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