Correlation Between GM and BOEING
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By analyzing existing cross correlation between General Motors and BOEING 5875 percent, you can compare the effects of market volatilities on GM and BOEING 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 BOEING. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and BOEING.
Diversification Opportunities for GM and BOEING
Good diversification
The 3 months correlation between GM and BOEING is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and BOEING 5875 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOEING 5875 percent 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 BOEING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOEING 5875 percent has no effect on the direction of GM i.e., GM and BOEING go up and down completely randomly.
Pair Corralation between GM and BOEING
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.65 times more return on investment than BOEING. However, GM is 1.65 times more volatile than BOEING 5875 percent. It trades about 0.08 of its potential returns per unit of risk. BOEING 5875 percent is currently generating about 0.02 per unit of risk. If you would invest 4,539 in General Motors on September 3, 2024 and sell it today you would earn a total of 1,020 from holding General Motors or generate 22.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.4% |
| Values | Daily Returns |
General Motors vs. BOEING 5875 percent
Performance |
| Timeline |
| General Motors |
| BOEING 5875 percent |
GM and BOEING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and BOEING
The main advantage of trading using opposite GM and BOEING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, BOEING 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 BOEING will offset losses from the drop in BOEING's long position.The idea behind General Motors and BOEING 5875 percent 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.| BOEING vs. Axalta Coating Systems | BOEING vs. Chemours Co | BOEING vs. Ecovyst | BOEING vs. Algoma Steel Group |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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