Correlation Between GM and Usaa Virginia
Can any of the company-specific risk be diversified away by investing in both GM and Usaa Virginia at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GM and Usaa Virginia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Usaa Virginia Bond, you can compare the effects of market volatilities on GM and Usaa Virginia 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 Usaa Virginia. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Usaa Virginia.
Diversification Opportunities for GM and Usaa Virginia
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GM and Usaa is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Usaa Virginia Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usaa Virginia Bond 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 Usaa Virginia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usaa Virginia Bond has no effect on the direction of GM i.e., GM and Usaa Virginia go up and down completely randomly.
Pair Corralation between GM and Usaa Virginia
Allowing for the 90-day total investment horizon General Motors is expected to generate 8.79 times more return on investment than Usaa Virginia. However, GM is 8.79 times more volatile than Usaa Virginia Bond. It trades about 0.08 of its potential returns per unit of risk. Usaa Virginia Bond is currently generating about 0.14 per unit of risk. If you would invest 4,551 in General Motors on September 1, 2024 and sell it today you would earn a total of 1,008 from holding General Motors or generate 22.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Usaa Virginia Bond
Performance |
| Timeline |
| General Motors |
| Usaa Virginia Bond |
GM and Usaa Virginia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Usaa Virginia
The main advantage of trading using opposite GM and Usaa Virginia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Usaa Virginia 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 Usaa Virginia will offset losses from the drop in Usaa Virginia's long position.The idea behind General Motors and Usaa Virginia Bond 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.| Usaa Virginia vs. Income Fund Income | Usaa Virginia vs. Usaa Nasdaq 100 | Usaa Virginia vs. Victory Diversified Stock | Usaa Virginia vs. Intermediate Term Bond Fund |
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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