Correlation Between GM and 06051GKH1
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By analyzing existing cross correlation between General Motors and BAC 5624556 04 FEB 28, you can compare the effects of market volatilities on GM and 06051GKH1 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 06051GKH1. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and 06051GKH1.
Diversification Opportunities for GM and 06051GKH1
Weak diversification
The 3 months correlation between GM and 06051GKH1 is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and BAC 5624556 04 FEB 28 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAC 5624556 04 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 06051GKH1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAC 5624556 04 has no effect on the direction of GM i.e., GM and 06051GKH1 go up and down completely randomly.
Pair Corralation between GM and 06051GKH1
Allowing for the 90-day total investment horizon General Motors is expected to generate 5.68 times more return on investment than 06051GKH1. However, GM is 5.68 times more volatile than BAC 5624556 04 FEB 28. It trades about 0.06 of its potential returns per unit of risk. BAC 5624556 04 FEB 28 is currently generating about 0.02 per unit of risk. If you would invest 3,525 in General Motors on August 31, 2024 and sell it today you would earn a total of 2,034 from holding General Motors or generate 57.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.14% |
| Values | Daily Returns |
General Motors vs. BAC 5624556 04 FEB 28
Performance |
| Timeline |
| General Motors |
| BAC 5624556 04 |
GM and 06051GKH1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and 06051GKH1
The main advantage of trading using opposite GM and 06051GKH1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, 06051GKH1 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 06051GKH1 will offset losses from the drop in 06051GKH1's long position.The idea behind General Motors and BAC 5624556 04 FEB 28 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.| 06051GKH1 vs. Amgen Inc | 06051GKH1 vs. Everus Construction Group | 06051GKH1 vs. Jacobs Solutions | 06051GKH1 vs. Xponential Fitness |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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