Correlation Between GM and TAISEM
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By analyzing existing cross correlation between General Motors and TAISEM 45 22 APR 52, you can compare the effects of market volatilities on GM and TAISEM 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 TAISEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and TAISEM.
Diversification Opportunities for GM and TAISEM
Excellent diversification
The 3 months correlation between GM and TAISEM is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and TAISEM 45 22 APR 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAISEM 45 22 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 TAISEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAISEM 45 22 has no effect on the direction of GM i.e., GM and TAISEM go up and down completely randomly.
Pair Corralation between GM and TAISEM
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.49 times more return on investment than TAISEM. However, GM is 1.49 times more volatile than TAISEM 45 22 APR 52. It trades about 0.14 of its potential returns per unit of risk. TAISEM 45 22 APR 52 is currently generating about -0.19 per unit of risk. If you would invest 5,180 in General Motors on September 3, 2024 and sell it today you would earn a total of 379.00 from holding General Motors or generate 7.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 55.0% |
| Values | Daily Returns |
General Motors vs. TAISEM 45 22 APR 52
Performance |
| Timeline |
| General Motors |
| TAISEM 45 22 |
GM and TAISEM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and TAISEM
The main advantage of trading using opposite GM and TAISEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, TAISEM 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 TAISEM will offset losses from the drop in TAISEM's long position.The idea behind General Motors and TAISEM 45 22 APR 52 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.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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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