Correlation Between GM and Vanguard LifeStrategy
Specify exactly 2 symbols:
By analyzing existing cross correlation between General Motors and Vanguard LifeStrategy 60, you can compare the effects of market volatilities on GM and Vanguard LifeStrategy 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 Vanguard LifeStrategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Vanguard LifeStrategy.
Diversification Opportunities for GM and Vanguard LifeStrategy
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Vanguard is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Vanguard LifeStrategy 60 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard LifeStrategy 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 Vanguard LifeStrategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard LifeStrategy has no effect on the direction of GM i.e., GM and Vanguard LifeStrategy go up and down completely randomly.
Pair Corralation between GM and Vanguard LifeStrategy
Allowing for the 90-day total investment horizon General Motors is expected to generate 5.03 times more return on investment than Vanguard LifeStrategy. However, GM is 5.03 times more volatile than Vanguard LifeStrategy 60. It trades about 0.13 of its potential returns per unit of risk. Vanguard LifeStrategy 60 is currently generating about 0.18 per unit of risk. If you would invest 5,154 in General Motors on August 30, 2024 and sell it today you would earn a total of 396.00 from holding General Motors or generate 7.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Vanguard LifeStrategy 60
Performance |
| Timeline |
| General Motors |
| Vanguard LifeStrategy |
GM and Vanguard LifeStrategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Vanguard LifeStrategy
The main advantage of trading using opposite GM and Vanguard LifeStrategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Vanguard LifeStrategy 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 Vanguard LifeStrategy will offset losses from the drop in Vanguard LifeStrategy's long position.The idea behind General Motors and Vanguard LifeStrategy 60 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.| Vanguard LifeStrategy vs. Vanguard ESG Developed | Vanguard LifeStrategy vs. Vanguard Funds Public | Vanguard LifeStrategy vs. Vanguard Funds PLC | Vanguard LifeStrategy vs. Vanguard Funds Public |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |