Correlation Between GM and BOARDWALK
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By analyzing existing cross correlation between General Motors and BOARDWALK PIPELINES LP, you can compare the effects of market volatilities on GM and BOARDWALK 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 BOARDWALK. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and BOARDWALK.
Diversification Opportunities for GM and BOARDWALK
Significant diversification
The 3 months correlation between GM and BOARDWALK is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and BOARDWALK PIPELINES LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOARDWALK PIPELINES 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 BOARDWALK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOARDWALK PIPELINES has no effect on the direction of GM i.e., GM and BOARDWALK go up and down completely randomly.
Pair Corralation between GM and BOARDWALK
Allowing for the 90-day total investment horizon General Motors is expected to generate 5.78 times more return on investment than BOARDWALK. However, GM is 5.78 times more volatile than BOARDWALK PIPELINES LP. It trades about 0.05 of its potential returns per unit of risk. BOARDWALK PIPELINES LP is currently generating about 0.01 per unit of risk. If you would invest 3,757 in General Motors on August 30, 2024 and sell it today you would earn a total of 1,793 from holding General Motors or generate 47.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.34% |
| Values | Daily Returns |
General Motors vs. BOARDWALK PIPELINES LP
Performance |
| Timeline |
| General Motors |
| BOARDWALK PIPELINES |
GM and BOARDWALK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and BOARDWALK
The main advantage of trading using opposite GM and BOARDWALK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, BOARDWALK 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 BOARDWALK will offset losses from the drop in BOARDWALK's long position.The idea behind General Motors and BOARDWALK PIPELINES LP 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.| BOARDWALK vs. AEP TEX INC | BOARDWALK vs. US BANK NATIONAL | BOARDWALK vs. Applied Blockchain | BOARDWALK vs. Neutra 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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