Correlation Between GM and 00206RJH6
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By analyzing existing cross correlation between General Motors and AT T 49, you can compare the effects of market volatilities on GM and 00206RJH6 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 00206RJH6. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and 00206RJH6.
Diversification Opportunities for GM and 00206RJH6
Good diversification
The 3 months correlation between GM and 00206RJH6 is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and AT T 49 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 00206RJH6 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 00206RJH6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 00206RJH6 has no effect on the direction of GM i.e., GM and 00206RJH6 go up and down completely randomly.
Pair Corralation between GM and 00206RJH6
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the 00206RJH6. In addition to that, GM is 4.4 times more volatile than AT T 49. It trades about -0.09 of its total potential returns per unit of risk. AT T 49 is currently generating about 0.24 per unit of volatility. If you would invest 8,735 in AT T 49 on November 29, 2024 and sell it today you would earn a total of 46.00 from holding AT T 49 or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 28.57% |
| Values | Daily Returns |
General Motors vs. AT T 49
Performance |
| Timeline |
| General Motors |
| 00206RJH6 |
GM and 00206RJH6 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and 00206RJH6
The main advantage of trading using opposite GM and 00206RJH6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, 00206RJH6 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 00206RJH6 will offset losses from the drop in 00206RJH6's long position.The idea behind General Motors and AT T 49 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.| 00206RJH6 vs. Deluxe | 00206RJH6 vs. WPP PLC ADR | 00206RJH6 vs. GMO Internet | 00206RJH6 vs. Western Digital |
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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