Correlation Between GM and SEMPRA
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By analyzing existing cross correlation between General Motors and SEMPRA ENERGY 325, you can compare the effects of market volatilities on GM and SEMPRA 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 SEMPRA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and SEMPRA.
Diversification Opportunities for GM and SEMPRA
Excellent diversification
The 3 months correlation between GM and SEMPRA is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and SEMPRA ENERGY 325 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEMPRA ENERGY 325 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 SEMPRA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEMPRA ENERGY 325 has no effect on the direction of GM i.e., GM and SEMPRA go up and down completely randomly.
Pair Corralation between GM and SEMPRA
Allowing for the 90-day total investment horizon General Motors is expected to generate 4.67 times more return on investment than SEMPRA. However, GM is 4.67 times more volatile than SEMPRA ENERGY 325. It trades about 0.12 of its potential returns per unit of risk. SEMPRA ENERGY 325 is currently generating about -0.03 per unit of risk. If you would invest 3,849 in General Motors on August 28, 2024 and sell it today you would earn a total of 2,171 from holding General Motors or generate 56.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 88.52% |
| Values | Daily Returns |
General Motors vs. SEMPRA ENERGY 325
Performance |
| Timeline |
| General Motors |
| SEMPRA ENERGY 325 |
GM and SEMPRA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and SEMPRA
The main advantage of trading using opposite GM and SEMPRA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, SEMPRA 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 SEMPRA will offset losses from the drop in SEMPRA's long position.The idea behind General Motors and SEMPRA ENERGY 325 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.| SEMPRA vs. AEP TEX INC | SEMPRA vs. US BANK NATIONAL | SEMPRA vs. Dupont De Nemours | SEMPRA vs. The Travelers Companies |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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