Correlation Between GM and 693627AY7
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By analyzing existing cross correlation between General Motors and PSI ENERGY INC, you can compare the effects of market volatilities on GM and 693627AY7 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 693627AY7. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and 693627AY7.
Diversification Opportunities for GM and 693627AY7
Excellent diversification
The 3 months correlation between GM and 693627AY7 is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and PSI ENERGY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PSI ENERGY INC 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 693627AY7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PSI ENERGY INC has no effect on the direction of GM i.e., GM and 693627AY7 go up and down completely randomly.
Pair Corralation between GM and 693627AY7
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.5 times more return on investment than 693627AY7. However, GM is 1.5 times more volatile than PSI ENERGY INC. It trades about 0.24 of its potential returns per unit of risk. PSI ENERGY INC is currently generating about 0.03 per unit of risk. If you would invest 5,292 in General Motors on August 24, 2024 and sell it today you would earn a total of 561.00 from holding General Motors or generate 10.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 69.57% |
| Values | Daily Returns |
General Motors vs. PSI ENERGY INC
Performance |
| Timeline |
| General Motors |
| PSI ENERGY INC |
GM and 693627AY7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and 693627AY7
The main advantage of trading using opposite GM and 693627AY7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, 693627AY7 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 693627AY7 will offset losses from the drop in 693627AY7's long position.The idea behind General Motors and PSI ENERGY INC 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.| 693627AY7 vs. AEP TEX INC | 693627AY7 vs. US BANK NATIONAL | 693627AY7 vs. Dupont De Nemours | 693627AY7 vs. The Travelers 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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