Correlation Between GM and ORACLE
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By analyzing existing cross correlation between General Motors and ORACLE PORATION, you can compare the effects of market volatilities on GM and ORACLE 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 ORACLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and ORACLE.
Diversification Opportunities for GM and ORACLE
Excellent diversification
The 3 months correlation between GM and ORACLE is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and ORACLE PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORACLE 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 ORACLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ORACLE PORATION has no effect on the direction of GM i.e., GM and ORACLE go up and down completely randomly.
Pair Corralation between GM and ORACLE
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.73 times more return on investment than ORACLE. However, General Motors is 1.38 times less risky than ORACLE. It trades about 0.25 of its potential returns per unit of risk. ORACLE PORATION is currently generating about -0.02 per unit of risk. If you would invest 5,272 in General Motors on August 25, 2024 and sell it today you would earn a total of 581.00 from holding General Motors or generate 11.02% 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. ORACLE PORATION
Performance |
| Timeline |
| General Motors |
| ORACLE PORATION |
GM and ORACLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and ORACLE
The main advantage of trading using opposite GM and ORACLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, ORACLE 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 ORACLE will offset losses from the drop in ORACLE's long position.The idea behind General Motors and ORACLE 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.| ORACLE vs. Sphere Entertainment Co | ORACLE vs. Dream Finders Homes | ORACLE vs. FMC Corporation | ORACLE vs. MYR Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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