Correlation Between GM and CMCSA
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By analyzing existing cross correlation between General Motors and CMCSA 2937 01 NOV 56, you can compare the effects of market volatilities on GM and CMCSA 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 CMCSA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and CMCSA.
Diversification Opportunities for GM and CMCSA
Good diversification
The 3 months correlation between GM and CMCSA is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and CMCSA 2937 01 NOV 56 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMCSA 2937 01 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 CMCSA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMCSA 2937 01 has no effect on the direction of GM i.e., GM and CMCSA go up and down completely randomly.
Pair Corralation between GM and CMCSA
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.91 times more return on investment than CMCSA. However, GM is 1.91 times more volatile than CMCSA 2937 01 NOV 56. It trades about 0.05 of its potential returns per unit of risk. CMCSA 2937 01 NOV 56 is currently generating about -0.01 per unit of risk. If you would invest 3,762 in General Motors on September 3, 2024 and sell it today you would earn a total of 1,742 from holding General Motors or generate 46.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.16% |
| Values | Daily Returns |
General Motors vs. CMCSA 2937 01 NOV 56
Performance |
| Timeline |
| General Motors |
| CMCSA 2937 01 |
GM and CMCSA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and CMCSA
The main advantage of trading using opposite GM and CMCSA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, CMCSA 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 CMCSA will offset losses from the drop in CMCSA's long position.The idea behind General Motors and CMCSA 2937 01 NOV 56 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.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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