Correlation Between GM and 902613AJ7
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By analyzing existing cross correlation between General Motors and UBS 4875, you can compare the effects of market volatilities on GM and 902613AJ7 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 902613AJ7. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and 902613AJ7.
Diversification Opportunities for GM and 902613AJ7
Poor diversification
The 3 months correlation between GM and 902613AJ7 is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and UBS 4875 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 902613AJ7 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 902613AJ7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 902613AJ7 has no effect on the direction of GM i.e., GM and 902613AJ7 go up and down completely randomly.
Pair Corralation between GM and 902613AJ7
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.68 times more return on investment than 902613AJ7. However, GM is 1.68 times more volatile than UBS 4875. It trades about 0.16 of its potential returns per unit of risk. UBS 4875 is currently generating about -0.39 per unit of risk. If you would invest 5,096 in General Motors on September 2, 2024 and sell it today you would earn a total of 463.00 from holding General Motors or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 28.57% |
| Values | Daily Returns |
General Motors vs. UBS 4875
Performance |
| Timeline |
| General Motors |
| 902613AJ7 |
GM and 902613AJ7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and 902613AJ7
The main advantage of trading using opposite GM and 902613AJ7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, 902613AJ7 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 902613AJ7 will offset losses from the drop in 902613AJ7's long position.The idea behind General Motors and UBS 4875 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.| 902613AJ7 vs. ATT Inc | 902613AJ7 vs. Home Depot | 902613AJ7 vs. Cisco Systems | 902613AJ7 vs. Dupont De Nemours |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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