Correlation Between GM and Wyndham
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By analyzing existing cross correlation between General Motors and Wyndham Destinations 51, you can compare the effects of market volatilities on GM and Wyndham 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 Wyndham. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Wyndham.
Diversification Opportunities for GM and Wyndham
Very good diversification
The 3 months correlation between GM and Wyndham is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Wyndham Destinations 51 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wyndham Destinations 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 Wyndham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wyndham Destinations has no effect on the direction of GM i.e., GM and Wyndham go up and down completely randomly.
Pair Corralation between GM and Wyndham
Allowing for the 90-day total investment horizon General Motors is expected to generate 17.53 times more return on investment than Wyndham. However, GM is 17.53 times more volatile than Wyndham Destinations 51. It trades about 0.16 of its potential returns per unit of risk. Wyndham Destinations 51 is currently generating about -0.2 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 Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
General Motors vs. Wyndham Destinations 51
Performance |
| Timeline |
| General Motors |
| Wyndham Destinations |
GM and Wyndham Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Wyndham
The main advantage of trading using opposite GM and Wyndham positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Wyndham 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 Wyndham will offset losses from the drop in Wyndham's long position.The idea behind General Motors and Wyndham Destinations 51 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.| Wyndham vs. Old Republic International | Wyndham vs. Analog Devices | Wyndham vs. Sun Life Financial | Wyndham vs. NETGEAR |
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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