Correlation Between GM and QBEAU
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By analyzing existing cross correlation between General Motors and QBEAU 5875, you can compare the effects of market volatilities on GM and QBEAU 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 QBEAU. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and QBEAU.
Diversification Opportunities for GM and QBEAU
Very weak diversification
The 3 months correlation between GM and QBEAU is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and QBEAU 5875 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QBEAU 5875 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 QBEAU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QBEAU 5875 has no effect on the direction of GM i.e., GM and QBEAU go up and down completely randomly.
Pair Corralation between GM and QBEAU
Allowing for the 90-day total investment horizon General Motors is expected to generate 6.27 times more return on investment than QBEAU. However, GM is 6.27 times more volatile than QBEAU 5875. It trades about 0.08 of its potential returns per unit of risk. QBEAU 5875 is currently generating about 0.04 per unit of risk. If you would invest 4,551 in General Motors on September 1, 2024 and sell it today you would earn a total of 1,008 from holding General Motors or generate 22.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 36.51% |
| Values | Daily Returns |
General Motors vs. QBEAU 5875
Performance |
| Timeline |
| General Motors |
| QBEAU 5875 |
GM and QBEAU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and QBEAU
The main advantage of trading using opposite GM and QBEAU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, QBEAU 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 QBEAU will offset losses from the drop in QBEAU's long position.The idea behind General Motors and QBEAU 5875 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.| QBEAU vs. Ihuman Inc | QBEAU vs. The Cheesecake Factory | QBEAU vs. Dennys Corp | QBEAU vs. Nexstar Broadcasting 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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