Correlation Between GM and 47233JDK1
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By analyzing existing cross correlation between General Motors and US47233JDK16, you can compare the effects of market volatilities on GM and 47233JDK1 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 47233JDK1. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and 47233JDK1.
Diversification Opportunities for GM and 47233JDK1
Poor diversification
The 3 months correlation between GM and 47233JDK1 is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and US47233JDK16 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US47233JDK16 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 47233JDK1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US47233JDK16 has no effect on the direction of GM i.e., GM and 47233JDK1 go up and down completely randomly.
Pair Corralation between GM and 47233JDK1
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.76 times more return on investment than 47233JDK1. However, General Motors is 1.32 times less risky than 47233JDK1. It trades about 0.07 of its potential returns per unit of risk. US47233JDK16 is currently generating about 0.02 per unit of risk. If you would invest 3,574 in General Motors on September 1, 2024 and sell it today you would earn a total of 1,985 from holding General Motors or generate 55.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 37.37% |
| Values | Daily Returns |
General Motors vs. US47233JDK16
Performance |
| Timeline |
| General Motors |
| US47233JDK16 |
GM and 47233JDK1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and 47233JDK1
The main advantage of trading using opposite GM and 47233JDK1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, 47233JDK1 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 47233JDK1 will offset losses from the drop in 47233JDK1's long position.The idea behind General Motors and US47233JDK16 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.| 47233JDK1 vs. Pool Corporation | 47233JDK1 vs. Asbury Automotive Group | 47233JDK1 vs. GoHealth | 47233JDK1 vs. Aegon NV ADR |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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