Correlation Between GM and BATSLN
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By analyzing existing cross correlation between General Motors and BATSLN 475 01 NOV 42, you can compare the effects of market volatilities on GM and BATSLN 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 BATSLN. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and BATSLN.
Diversification Opportunities for GM and BATSLN
Very good diversification
The 3 months correlation between GM and BATSLN is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and BATSLN 475 01 NOV 42 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BATSLN 475 01 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 BATSLN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BATSLN 475 01 has no effect on the direction of GM i.e., GM and BATSLN go up and down completely randomly.
Pair Corralation between GM and BATSLN
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.69 times more return on investment than BATSLN. However, General Motors is 1.46 times less risky than BATSLN. It trades about 0.12 of its potential returns per unit of risk. BATSLN 475 01 NOV 42 is currently generating about 0.01 per unit of risk. If you would invest 3,242 in General Motors on August 31, 2024 and sell it today you would earn a total of 2,308 from holding General Motors or generate 71.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 50.6% |
| Values | Daily Returns |
General Motors vs. BATSLN 475 01 NOV 42
Performance |
| Timeline |
| General Motors |
| BATSLN 475 01 |
GM and BATSLN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and BATSLN
The main advantage of trading using opposite GM and BATSLN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, BATSLN 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 BATSLN will offset losses from the drop in BATSLN's long position.The idea behind General Motors and BATSLN 475 01 NOV 42 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.| BATSLN vs. Q2 Holdings | BATSLN vs. Ecolab Inc | BATSLN vs. Definitive Healthcare Corp | BATSLN vs. Sealed Air |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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