Correlation Between GM and 66977WAP4
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By analyzing existing cross correlation between General Motors and Nova Chemicals 5, you can compare the effects of market volatilities on GM and 66977WAP4 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 66977WAP4. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and 66977WAP4.
Diversification Opportunities for GM and 66977WAP4
Good diversification
The 3 months correlation between GM and 66977WAP4 is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Nova Chemicals 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Chemicals 5 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 66977WAP4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Chemicals 5 has no effect on the direction of GM i.e., GM and 66977WAP4 go up and down completely randomly.
Pair Corralation between GM and 66977WAP4
Allowing for the 90-day total investment horizon GM is expected to generate 25.83 times less return on investment than 66977WAP4. But when comparing it to its historical volatility, General Motors is 32.1 times less risky than 66977WAP4. It trades about 0.07 of its potential returns per unit of risk. Nova Chemicals 5 is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 9,700 in Nova Chemicals 5 on August 31, 2024 and sell it today you would lose (137.00) from holding Nova Chemicals 5 or give up 1.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 66.31% |
| Values | Daily Returns |
General Motors vs. Nova Chemicals 5
Performance |
| Timeline |
| General Motors |
| Nova Chemicals 5 |
GM and 66977WAP4 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and 66977WAP4
The main advantage of trading using opposite GM and 66977WAP4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, 66977WAP4 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 66977WAP4 will offset losses from the drop in 66977WAP4's long position.The idea behind General Motors and Nova Chemicals 5 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.| 66977WAP4 vs. Addus HomeCare | 66977WAP4 vs. Ryanair Holdings PLC | 66977WAP4 vs. Ihuman Inc | 66977WAP4 vs. China Clean Energy |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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