Correlation Between GM and PUBLIC
Specify exactly 2 symbols:
By analyzing existing cross correlation between General Motors and PUBLIC SVC O, you can compare the effects of market volatilities on GM and PUBLIC 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 PUBLIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and PUBLIC.
Diversification Opportunities for GM and PUBLIC
Pay attention - limited upside
The 3 months correlation between GM and PUBLIC is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and PUBLIC SVC O in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PUBLIC SVC O 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 PUBLIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PUBLIC SVC O has no effect on the direction of GM i.e., GM and PUBLIC go up and down completely randomly.
Pair Corralation between GM and PUBLIC
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.12 times more return on investment than PUBLIC. However, GM is 1.12 times more volatile than PUBLIC SVC O. It trades about 0.25 of its potential returns per unit of risk. PUBLIC SVC O is currently generating about 0.14 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 | 95.45% |
| Values | Daily Returns |
General Motors vs. PUBLIC SVC O
Performance |
| Timeline |
| General Motors |
| PUBLIC SVC O |
GM and PUBLIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and PUBLIC
The main advantage of trading using opposite GM and PUBLIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, PUBLIC 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 PUBLIC will offset losses from the drop in PUBLIC's long position.The idea behind General Motors and PUBLIC SVC O 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.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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |