Correlation Between GM and ASTRAZENECA
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By analyzing existing cross correlation between General Motors and ASTRAZENECA PLC 4375, you can compare the effects of market volatilities on GM and ASTRAZENECA 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 ASTRAZENECA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and ASTRAZENECA.
Diversification Opportunities for GM and ASTRAZENECA
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and ASTRAZENECA is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and ASTRAZENECA PLC 4375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASTRAZENECA PLC 4375 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 ASTRAZENECA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASTRAZENECA PLC 4375 has no effect on the direction of GM i.e., GM and ASTRAZENECA go up and down completely randomly.
Pair Corralation between GM and ASTRAZENECA
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.76 times more return on investment than ASTRAZENECA. However, GM is 2.76 times more volatile than ASTRAZENECA PLC 4375. It trades about 0.08 of its potential returns per unit of risk. ASTRAZENECA PLC 4375 is currently generating about 0.04 per unit of risk. If you would invest 4,551 in General Motors on August 31, 2024 and sell it today you would earn a total of 1,008 from holding General Motors or generate 22.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 81.1% |
| Values | Daily Returns |
General Motors vs. ASTRAZENECA PLC 4375
Performance |
| Timeline |
| General Motors |
| ASTRAZENECA PLC 4375 |
GM and ASTRAZENECA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and ASTRAZENECA
The main advantage of trading using opposite GM and ASTRAZENECA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, ASTRAZENECA 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 ASTRAZENECA will offset losses from the drop in ASTRAZENECA's long position.The idea behind General Motors and ASTRAZENECA PLC 4375 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.| ASTRAZENECA vs. AEP TEX INC | ASTRAZENECA vs. US BANK NATIONAL | ASTRAZENECA vs. Bank of America | ASTRAZENECA vs. GE Aerospace |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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