Correlation Between GM and DEERE
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By analyzing existing cross correlation between General Motors and DEERE 81 percent, you can compare the effects of market volatilities on GM and DEERE 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 DEERE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and DEERE.
Diversification Opportunities for GM and DEERE
Very good diversification
The 3 months correlation between GM and DEERE is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and DEERE 81 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEERE 81 percent 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 DEERE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEERE 81 percent has no effect on the direction of GM i.e., GM and DEERE go up and down completely randomly.
Pair Corralation between GM and DEERE
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the DEERE. In addition to that, GM is 5.08 times more volatile than DEERE 81 percent. It trades about -0.16 of its total potential returns per unit of risk. DEERE 81 percent is currently generating about -0.01 per unit of volatility. If you would invest 11,557 in DEERE 81 percent on January 14, 2025 and sell it today you would lose (18.00) from holding DEERE 81 percent or give up 0.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
General Motors vs. DEERE 81 percent
Performance |
| Timeline |
| General Motors |
| DEERE 81 percent |
GM and DEERE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and DEERE
The main advantage of trading using opposite GM and DEERE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, DEERE 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 DEERE will offset losses from the drop in DEERE's long position.The idea behind General Motors and DEERE 81 percent 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.| DEERE vs. Tower One Wireless | DEERE vs. Southwest Gas Holdings | DEERE vs. Intuitive Surgical | DEERE vs. American Electric Power |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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