Correlation Between GM and 42225UAD6

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both GM and 42225UAD6 at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GM and 42225UAD6 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and HEALTHCARE TR AMER, you can compare the effects of market volatilities on GM and 42225UAD6 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 42225UAD6. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and 42225UAD6.

Diversification Opportunities for GM and 42225UAD6

-0.63
  Correlation Coefficient
 GM

Excellent diversification

The 3 months correlation between GM and 42225UAD6 is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and HEALTHCARE TR AMER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEALTHCARE TR AMER 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 42225UAD6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEALTHCARE TR AMER has no effect on the direction of GM i.e., GM and 42225UAD6 go up and down completely randomly.

Pair Corralation between GM and 42225UAD6

Allowing for the 90-day total investment horizon General Motors is expected to under-perform the 42225UAD6. In addition to that, GM is 3.75 times more volatile than HEALTHCARE TR AMER. It trades about -0.34 of its total potential returns per unit of risk. HEALTHCARE TR AMER is currently generating about -0.25 per unit of volatility. If you would invest  9,831  in HEALTHCARE TR AMER on November 27, 2024 and sell it today you would lose (261.00) from holding HEALTHCARE TR AMER or give up 2.65% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy85.0%
ValuesDaily Returns

General Motors  vs.  HEALTHCARE TR AMER

 Performance 
       Timeline  
General Motors 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days General Motors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
HEALTHCARE TR AMER 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days HEALTHCARE TR AMER has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 42225UAD6 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

GM and 42225UAD6 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GM and 42225UAD6

The main advantage of trading using opposite GM and 42225UAD6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, 42225UAD6 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 42225UAD6 will offset losses from the drop in 42225UAD6's long position.
GM vs. Tesla Inc
GM vs. Rivian Automotive
GM vs. Nio Class A
GM vs. Xpeng Inc
The idea behind General Motors and HEALTHCARE TR AMER 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.
42225UAD6 vs. Marimaca Copper Corp
42225UAD6 vs. East Africa Metals
42225UAD6 vs. CleanGo Innovations
42225UAD6 vs. Highway Holdings Limited
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

Other Complementary Tools

Economic Indicators
Top statistical indicators that provide insights into how an economy is performing
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY