Correlation Between GM and CONSUMERS
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By analyzing existing cross correlation between General Motors and CONSUMERS ENERGY 395, you can compare the effects of market volatilities on GM and CONSUMERS 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 CONSUMERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and CONSUMERS.
Diversification Opportunities for GM and CONSUMERS
Pay attention - limited upside
The 3 months correlation between GM and CONSUMERS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and CONSUMERS ENERGY 395 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSUMERS ENERGY 5 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 CONSUMERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSUMERS ENERGY 5 has no effect on the direction of GM i.e., GM and CONSUMERS go up and down completely randomly.
Pair Corralation between GM and CONSUMERS
If you would invest 3,617 in General Motors on September 2, 2024 and sell it today you would earn a total of 1,942 from holding General Motors or generate 53.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
General Motors vs. CONSUMERS ENERGY 395
Performance |
| Timeline |
| General Motors |
| CONSUMERS ENERGY 5 |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and CONSUMERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and CONSUMERS
The main advantage of trading using opposite GM and CONSUMERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, CONSUMERS 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 CONSUMERS will offset losses from the drop in CONSUMERS's long position.The idea behind General Motors and CONSUMERS ENERGY 395 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.| CONSUMERS vs. Keurig Dr Pepper | CONSUMERS vs. Compania Cervecerias Unidas | CONSUMERS vs. Weyco Group | CONSUMERS vs. Skechers USA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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