Correlation Between GM and ANTHEM
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By analyzing existing cross correlation between General Motors and ANTHEM INC 455, you can compare the effects of market volatilities on GM and ANTHEM 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 ANTHEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and ANTHEM.
Diversification Opportunities for GM and ANTHEM
Pay attention - limited upside
The 3 months correlation between GM and ANTHEM is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and ANTHEM INC 455 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTHEM INC 455 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 ANTHEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTHEM INC 455 has no effect on the direction of GM i.e., GM and ANTHEM go up and down completely randomly.
Pair Corralation between GM and ANTHEM
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.22 times more return on investment than ANTHEM. However, GM is 1.22 times more volatile than ANTHEM INC 455. It trades about 0.24 of its potential returns per unit of risk. ANTHEM INC 455 is currently generating about 0.18 per unit of risk. If you would invest 5,292 in General Motors on August 24, 2024 and sell it today you would earn a total of 561.00 from holding General Motors or generate 10.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 65.22% |
| Values | Daily Returns |
General Motors vs. ANTHEM INC 455
Performance |
| Timeline |
| General Motors |
| ANTHEM INC 455 |
GM and ANTHEM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and ANTHEM
The main advantage of trading using opposite GM and ANTHEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, ANTHEM 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 ANTHEM will offset losses from the drop in ANTHEM's long position.The idea behind General Motors and ANTHEM INC 455 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.| ANTHEM vs. AEP TEX INC | ANTHEM vs. US BANK NATIONAL | ANTHEM vs. Eat Beyond Global | ANTHEM vs. Charles Schwab 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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