Correlation Between GM and MICROSOFT
Specify exactly 2 symbols:
By analyzing existing cross correlation between General Motors and MICROSOFT PORATION, you can compare the effects of market volatilities on GM and MICROSOFT 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 MICROSOFT. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and MICROSOFT.
Diversification Opportunities for GM and MICROSOFT
Modest diversification
The 3 months correlation between GM and MICROSOFT is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and MICROSOFT PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MICROSOFT PORATION 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 MICROSOFT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MICROSOFT PORATION has no effect on the direction of GM i.e., GM and MICROSOFT go up and down completely randomly.
Pair Corralation between GM and MICROSOFT
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the MICROSOFT. In addition to that, GM is 1.29 times more volatile than MICROSOFT PORATION. It trades about -0.14 of its total potential returns per unit of risk. MICROSOFT PORATION is currently generating about 0.37 per unit of volatility. If you would invest 6,613 in MICROSOFT PORATION on September 13, 2024 and sell it today you would earn a total of 1,082 from holding MICROSOFT PORATION or generate 16.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. MICROSOFT PORATION
Performance |
| Timeline |
| General Motors |
| MICROSOFT PORATION |
GM and MICROSOFT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and MICROSOFT
The main advantage of trading using opposite GM and MICROSOFT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, MICROSOFT 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 MICROSOFT will offset losses from the drop in MICROSOFT's long position.The idea behind General Motors and MICROSOFT PORATION 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.| MICROSOFT vs. AEP TEX INC | MICROSOFT vs. US BANK NATIONAL | MICROSOFT vs. Applied Blockchain | MICROSOFT vs. BigBearai Holdings |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |