Correlation Between GM and EXELON
Specify exactly 2 symbols:
By analyzing existing cross correlation between General Motors and EXELON GENERATION LLC, you can compare the effects of market volatilities on GM and EXELON 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 EXELON. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and EXELON.
Diversification Opportunities for GM and EXELON
Excellent diversification
The 3 months correlation between GM and EXELON is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and EXELON GENERATION LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXELON GENERATION LLC 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 EXELON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXELON GENERATION LLC has no effect on the direction of GM i.e., GM and EXELON go up and down completely randomly.
Pair Corralation between GM and EXELON
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.72 times more return on investment than EXELON. However, GM is 2.72 times more volatile than EXELON GENERATION LLC. It trades about 0.12 of its potential returns per unit of risk. EXELON GENERATION LLC is currently generating about -0.19 per unit of risk. If you would invest 5,197 in General Motors on August 31, 2024 and sell it today you would earn a total of 353.00 from holding General Motors or generate 6.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 77.27% |
| Values | Daily Returns |
General Motors vs. EXELON GENERATION LLC
Performance |
| Timeline |
| General Motors |
| EXELON GENERATION LLC |
GM and EXELON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and EXELON
The main advantage of trading using opposite GM and EXELON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, EXELON 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 EXELON will offset losses from the drop in EXELON's long position.The idea behind General Motors and EXELON GENERATION LLC 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |