Correlation Between GM and QUALCOMM
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By analyzing existing cross correlation between General Motors and QUALCOMM INC 43, you can compare the effects of market volatilities on GM and QUALCOMM 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 QUALCOMM. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and QUALCOMM.
Diversification Opportunities for GM and QUALCOMM
Pay attention - limited upside
The 3 months correlation between GM and QUALCOMM is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and QUALCOMM INC 43 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QUALCOMM INC 43 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 QUALCOMM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QUALCOMM INC 43 has no effect on the direction of GM i.e., GM and QUALCOMM go up and down completely randomly.
Pair Corralation between GM and QUALCOMM
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.86 times more return on investment than QUALCOMM. However, GM is 2.86 times more volatile than QUALCOMM INC 43. It trades about 0.08 of its potential returns per unit of risk. QUALCOMM INC 43 is currently generating about -0.1 per unit of risk. If you would invest 4,935 in General Motors on August 29, 2024 and sell it today you would earn a total of 544.00 from holding General Motors or generate 11.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. QUALCOMM INC 43
Performance |
| Timeline |
| General Motors |
| QUALCOMM INC 43 |
GM and QUALCOMM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and QUALCOMM
The main advantage of trading using opposite GM and QUALCOMM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, QUALCOMM 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 QUALCOMM will offset losses from the drop in QUALCOMM's long position.The idea behind General Motors and QUALCOMM INC 43 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.| QUALCOMM vs. Cumulus Media Class | QUALCOMM vs. Zoom Video Communications | QUALCOMM vs. Nexstar Broadcasting Group | QUALCOMM vs. 51Talk Online Education |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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