Correlation Between GM and 10X Capital
Can any of the company-specific risk be diversified away by investing in both GM and 10X Capital 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 10X Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and 10X Capital Venture, you can compare the effects of market volatilities on GM and 10X Capital 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 10X Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and 10X Capital.
Diversification Opportunities for GM and 10X Capital
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GM and 10X is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and 10X Capital Venture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 10X Capital Venture 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 10X Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 10X Capital Venture has no effect on the direction of GM i.e., GM and 10X Capital go up and down completely randomly.
Pair Corralation between GM and 10X Capital
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.45 times more return on investment than 10X Capital. However, GM is 2.45 times more volatile than 10X Capital Venture. It trades about 0.05 of its potential returns per unit of risk. 10X Capital Venture is currently generating about 0.03 per unit of risk. If you would invest 3,805 in General Motors on September 3, 2024 and sell it today you would earn a total of 1,699 from holding General Motors or generate 44.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 80.2% |
| Values | Daily Returns |
General Motors vs. 10X Capital Venture
Performance |
| Timeline |
| General Motors |
| 10X Capital Venture |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and 10X Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and 10X Capital
The main advantage of trading using opposite GM and 10X Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, 10X Capital 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 10X Capital will offset losses from the drop in 10X Capital's long position.The idea behind General Motors and 10X Capital Venture 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.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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |