Correlation Between GM and 69331CAJ7
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By analyzing existing cross correlation between General Motors and PGE 525 percent, you can compare the effects of market volatilities on GM and 69331CAJ7 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 69331CAJ7. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and 69331CAJ7.
Diversification Opportunities for GM and 69331CAJ7
Excellent diversification
The 3 months correlation between GM and 69331CAJ7 is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and PGE 525 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGE 525 percent 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 69331CAJ7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGE 525 percent has no effect on the direction of GM i.e., GM and 69331CAJ7 go up and down completely randomly.
Pair Corralation between GM and 69331CAJ7
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.85 times more return on investment than 69331CAJ7. However, GM is 1.85 times more volatile than PGE 525 percent. It trades about 0.16 of its potential returns per unit of risk. PGE 525 percent is currently generating about -0.17 per unit of risk. If you would invest 5,096 in General Motors on September 2, 2024 and sell it today you would earn a total of 463.00 from holding General Motors or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
General Motors vs. PGE 525 percent
Performance |
| Timeline |
| General Motors |
| PGE 525 percent |
GM and 69331CAJ7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and 69331CAJ7
The main advantage of trading using opposite GM and 69331CAJ7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, 69331CAJ7 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 69331CAJ7 will offset losses from the drop in 69331CAJ7's long position.The idea behind General Motors and PGE 525 percent 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.| 69331CAJ7 vs. AEP TEX INC | 69331CAJ7 vs. US BANK NATIONAL | 69331CAJ7 vs. International Business Machines | 69331CAJ7 vs. Intel |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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