Correlation Between GM and CARRIER
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By analyzing existing cross correlation between General Motors and CARRIER GLOBAL P, you can compare the effects of market volatilities on GM and CARRIER 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 CARRIER. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and CARRIER.
Diversification Opportunities for GM and CARRIER
Pay attention - limited upside
The 3 months correlation between GM and CARRIER is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and CARRIER GLOBAL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARRIER GLOBAL P 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 CARRIER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARRIER GLOBAL P has no effect on the direction of GM i.e., GM and CARRIER go up and down completely randomly.
Pair Corralation between GM and CARRIER
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.72 times more return on investment than CARRIER. However, GM is 2.72 times more volatile than CARRIER GLOBAL P. It trades about 0.11 of its potential returns per unit of risk. CARRIER GLOBAL P is currently generating about 0.03 per unit of risk. If you would invest 3,348 in General Motors on September 3, 2024 and sell it today you would earn a total of 2,156 from holding General Motors or generate 64.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
General Motors vs. CARRIER GLOBAL P
Performance |
| Timeline |
| General Motors |
| CARRIER GLOBAL P |
GM and CARRIER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and CARRIER
The main advantage of trading using opposite GM and CARRIER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, CARRIER 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 CARRIER will offset losses from the drop in CARRIER's long position.The idea behind General Motors and CARRIER GLOBAL P 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.| CARRIER vs. Senmiao Technology | CARRIER vs. Sphere Entertainment Co | CARRIER vs. WiMi Hologram Cloud | CARRIER vs. Casio Computer Co |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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