Correlation Between GM and REPUBLIC
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By analyzing existing cross correlation between General Motors and REPUBLIC SVCS INC, you can compare the effects of market volatilities on GM and REPUBLIC 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 REPUBLIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and REPUBLIC.
Diversification Opportunities for GM and REPUBLIC
Excellent diversification
The 3 months correlation between GM and REPUBLIC is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and REPUBLIC SVCS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REPUBLIC SVCS 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 REPUBLIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REPUBLIC SVCS INC has no effect on the direction of GM i.e., GM and REPUBLIC go up and down completely randomly.
Pair Corralation between GM and REPUBLIC
Allowing for the 90-day total investment horizon GM is expected to generate 19.43 times less return on investment than REPUBLIC. But when comparing it to its historical volatility, General Motors is 22.25 times less risky than REPUBLIC. It trades about 0.05 of its potential returns per unit of risk. REPUBLIC SVCS INC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 9,420 in REPUBLIC SVCS INC on September 2, 2024 and sell it today you would lose (23.00) from holding REPUBLIC SVCS INC or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.55% |
| Values | Daily Returns |
General Motors vs. REPUBLIC SVCS INC
Performance |
| Timeline |
| General Motors |
| REPUBLIC SVCS INC |
GM and REPUBLIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and REPUBLIC
The main advantage of trading using opposite GM and REPUBLIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, REPUBLIC 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 REPUBLIC will offset losses from the drop in REPUBLIC's long position.The idea behind General Motors and REPUBLIC SVCS 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.| REPUBLIC vs. Cars Inc | REPUBLIC vs. Brunswick | REPUBLIC vs. Modine Manufacturing | REPUBLIC vs. Wabash National |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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