Correlation Between GM and DTRGR
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By analyzing existing cross correlation between General Motors and DTRGR 25 14 DEC 31, you can compare the effects of market volatilities on GM and DTRGR 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 DTRGR. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and DTRGR.
Diversification Opportunities for GM and DTRGR
Significant diversification
The 3 months correlation between GM and DTRGR is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and DTRGR 25 14 DEC 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DTRGR 25 14 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 DTRGR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DTRGR 25 14 has no effect on the direction of GM i.e., GM and DTRGR go up and down completely randomly.
Pair Corralation between GM and DTRGR
Allowing for the 90-day total investment horizon General Motors is expected to generate 3.39 times more return on investment than DTRGR. However, GM is 3.39 times more volatile than DTRGR 25 14 DEC 31. It trades about 0.05 of its potential returns per unit of risk. DTRGR 25 14 DEC 31 is currently generating about 0.02 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 Together |
| Strength | Insignificant |
| Accuracy | 53.05% |
| Values | Daily Returns |
General Motors vs. DTRGR 25 14 DEC 31
Performance |
| Timeline |
| General Motors |
| DTRGR 25 14 |
GM and DTRGR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and DTRGR
The main advantage of trading using opposite GM and DTRGR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, DTRGR 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 DTRGR will offset losses from the drop in DTRGR's long position.The idea behind General Motors and DTRGR 25 14 DEC 31 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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