Correlation Between GM and 693304AV9
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By analyzing existing cross correlation between General Motors and PECO ENERGY 37, you can compare the effects of market volatilities on GM and 693304AV9 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 693304AV9. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and 693304AV9.
Diversification Opportunities for GM and 693304AV9
Good diversification
The 3 months correlation between GM and 693304AV9 is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and PECO ENERGY 37 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PECO ENERGY 37 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 693304AV9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PECO ENERGY 37 has no effect on the direction of GM i.e., GM and 693304AV9 go up and down completely randomly.
Pair Corralation between GM and 693304AV9
Allowing for the 90-day total investment horizon GM is expected to generate 107.96 times less return on investment than 693304AV9. But when comparing it to its historical volatility, General Motors is 52.37 times less risky than 693304AV9. It trades about 0.05 of its potential returns per unit of risk. PECO ENERGY 37 is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 8,438 in PECO ENERGY 37 on August 28, 2024 and sell it today you would lose (715.00) from holding PECO ENERGY 37 or give up 8.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 33.67% |
| Values | Daily Returns |
General Motors vs. PECO ENERGY 37
Performance |
| Timeline |
| General Motors |
| PECO ENERGY 37 |
GM and 693304AV9 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and 693304AV9
The main advantage of trading using opposite GM and 693304AV9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, 693304AV9 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 693304AV9 will offset losses from the drop in 693304AV9's long position.The idea behind General Motors and PECO ENERGY 37 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.| 693304AV9 vs. Eastman Chemical | 693304AV9 vs. Axalta Coating Systems | 693304AV9 vs. Arq Inc | 693304AV9 vs. Albertsons Companies |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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