Correlation Between GM and U36547AF1
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By analyzing existing cross correlation between General Motors and GPS 3625 01 OCT 29, you can compare the effects of market volatilities on GM and U36547AF1 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 U36547AF1. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and U36547AF1.
Diversification Opportunities for GM and U36547AF1
Very weak diversification
The 3 months correlation between GM and U36547AF1 is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and GPS 3625 01 OCT 29 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GPS 3625 01 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 U36547AF1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GPS 3625 01 has no effect on the direction of GM i.e., GM and U36547AF1 go up and down completely randomly.
Pair Corralation between GM and U36547AF1
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.51 times more return on investment than U36547AF1. However, GM is 1.51 times more volatile than GPS 3625 01 OCT 29. It trades about 0.14 of its potential returns per unit of risk. GPS 3625 01 OCT 29 is currently generating about -0.26 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 Together |
| Strength | Weak |
| Accuracy | 60.0% |
| Values | Daily Returns |
General Motors vs. GPS 3625 01 OCT 29
Performance |
| Timeline |
| General Motors |
| GPS 3625 01 |
GM and U36547AF1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and U36547AF1
The main advantage of trading using opposite GM and U36547AF1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, U36547AF1 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 U36547AF1 will offset losses from the drop in U36547AF1's long position.The idea behind General Motors and GPS 3625 01 OCT 29 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.| U36547AF1 vs. Molson Coors Brewing | U36547AF1 vs. Datadog | U36547AF1 vs. CDW Corp | U36547AF1 vs. Data3 Limited |
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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