Correlation Between GM and 931142EW9
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By analyzing existing cross correlation between General Motors and WMT 39 09 SEP 25, you can compare the effects of market volatilities on GM and 931142EW9 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 931142EW9. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and 931142EW9.
Diversification Opportunities for GM and 931142EW9
Very good diversification
The 3 months correlation between GM and 931142EW9 is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and WMT 39 09 SEP 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WMT 09 SEP 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 931142EW9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WMT 09 SEP has no effect on the direction of GM i.e., GM and 931142EW9 go up and down completely randomly.
Pair Corralation between GM and 931142EW9
Allowing for the 90-day total investment horizon General Motors is expected to generate 5.86 times more return on investment than 931142EW9. However, GM is 5.86 times more volatile than WMT 39 09 SEP 25. It trades about 0.26 of its potential returns per unit of risk. WMT 39 09 SEP 25 is currently generating about -0.16 per unit of risk. If you would invest 5,273 in General Motors on August 27, 2024 and sell it today you would earn a total of 580.00 from holding General Motors or generate 11.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. WMT 39 09 SEP 25
Performance |
| Timeline |
| General Motors |
| WMT 09 SEP |
GM and 931142EW9 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and 931142EW9
The main advantage of trading using opposite GM and 931142EW9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, 931142EW9 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 931142EW9 will offset losses from the drop in 931142EW9's long position.The idea behind General Motors and WMT 39 09 SEP 25 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.| 931142EW9 vs. AEP TEX INC | 931142EW9 vs. US BANK NATIONAL | 931142EW9 vs. 3M Company | 931142EW9 vs. Alcoa Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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