Correlation Between GM and 552953CD1
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By analyzing existing cross correlation between General Motors and MGM Resorts International, you can compare the effects of market volatilities on GM and 552953CD1 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 552953CD1. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and 552953CD1.
Diversification Opportunities for GM and 552953CD1
Excellent diversification
The 3 months correlation between GM and 552953CD1 is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and MGM Resorts International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGM Resorts International 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 552953CD1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGM Resorts International has no effect on the direction of GM i.e., GM and 552953CD1 go up and down completely randomly.
Pair Corralation between GM and 552953CD1
Allowing for the 90-day total investment horizon General Motors is expected to generate 3.44 times more return on investment than 552953CD1. However, GM is 3.44 times more volatile than MGM Resorts International. It trades about 0.17 of its potential returns per unit of risk. MGM Resorts International is currently generating about -0.17 per unit of risk. If you would invest 5,076 in General Motors on September 1, 2024 and sell it today you would earn a total of 483.00 from holding General Motors or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. MGM Resorts International
Performance |
| Timeline |
| General Motors |
| MGM Resorts International |
GM and 552953CD1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and 552953CD1
The main advantage of trading using opposite GM and 552953CD1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, 552953CD1 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 552953CD1 will offset losses from the drop in 552953CD1's long position.The idea behind General Motors and MGM Resorts International 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.| 552953CD1 vs. Corporacion America Airports | 552953CD1 vs. EvoAir Holdings | 552953CD1 vs. Hudson Pacific Properties | 552953CD1 vs. Merit Medical Systems |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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