Correlation Between GM and 00774MAY1
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By analyzing existing cross correlation between General Motors and AER 34 29 OCT 33, you can compare the effects of market volatilities on GM and 00774MAY1 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 00774MAY1. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and 00774MAY1.
Diversification Opportunities for GM and 00774MAY1
Pay attention - limited upside
The 3 months correlation between GM and 00774MAY1 is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and AER 34 29 OCT 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AER 34 29 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 00774MAY1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AER 34 29 has no effect on the direction of GM i.e., GM and 00774MAY1 go up and down completely randomly.
Pair Corralation between GM and 00774MAY1
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.98 times more return on investment than 00774MAY1. However, General Motors is 1.03 times less risky than 00774MAY1. It trades about 0.32 of its potential returns per unit of risk. AER 34 29 OCT 33 is currently generating about -0.21 per unit of risk. If you would invest 5,273 in General Motors on August 28, 2024 and sell it today you would earn a total of 747.00 from holding General Motors or generate 14.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
General Motors vs. AER 34 29 OCT 33
Performance |
| Timeline |
| General Motors |
| AER 34 29 |
GM and 00774MAY1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and 00774MAY1
The main advantage of trading using opposite GM and 00774MAY1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, 00774MAY1 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 00774MAY1 will offset losses from the drop in 00774MAY1's long position.The idea behind General Motors and AER 34 29 OCT 33 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.| 00774MAY1 vs. Datadog | 00774MAY1 vs. Anheuser Busch Inbev | 00774MAY1 vs. Fomento Economico Mexicano | 00774MAY1 vs. Vita Coco |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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