Correlation Between GM and 12673PAJ4
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By analyzing existing cross correlation between General Motors and CA INC 47, you can compare the effects of market volatilities on GM and 12673PAJ4 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 12673PAJ4. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and 12673PAJ4.
Diversification Opportunities for GM and 12673PAJ4
Very good diversification
The 3 months correlation between GM and 12673PAJ4 is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and CA INC 47 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CA INC 47 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 12673PAJ4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CA INC 47 has no effect on the direction of GM i.e., GM and 12673PAJ4 go up and down completely randomly.
Pair Corralation between GM and 12673PAJ4
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.38 times more return on investment than 12673PAJ4. However, GM is 2.38 times more volatile than CA INC 47. It trades about 0.04 of its potential returns per unit of risk. CA INC 47 is currently generating about 0.02 per unit of risk. If you would invest 3,507 in General Motors on November 27, 2024 and sell it today you would earn a total of 1,150 from holding General Motors or generate 32.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 89.38% |
| Values | Daily Returns |
General Motors vs. CA INC 47
Performance |
| Timeline |
| General Motors |
| CA INC 47 |
GM and 12673PAJ4 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and 12673PAJ4
The main advantage of trading using opposite GM and 12673PAJ4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, 12673PAJ4 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 12673PAJ4 will offset losses from the drop in 12673PAJ4's long position.The idea behind General Motors and CA INC 47 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.| 12673PAJ4 vs. Lipocine | 12673PAJ4 vs. BioNTech SE | 12673PAJ4 vs. Inhibrx | 12673PAJ4 vs. Academy Sports Outdoors |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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