Correlation Between GM and Venzee Technologies
Can any of the company-specific risk be diversified away by investing in both GM and Venzee Technologies 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 Venzee Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Venzee Technologies, you can compare the effects of market volatilities on GM and Venzee Technologies 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 Venzee Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Venzee Technologies.
Diversification Opportunities for GM and Venzee Technologies
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GM and Venzee is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Venzee Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Venzee Technologies 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 Venzee Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Venzee Technologies has no effect on the direction of GM i.e., GM and Venzee Technologies go up and down completely randomly.
Pair Corralation between GM and Venzee Technologies
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Venzee Technologies. But the stock apears to be less risky and, when comparing its historical volatility, General Motors is 2.22 times less risky than Venzee Technologies. The stock trades about -0.17 of its potential returns per unit of risk. The Venzee Technologies is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Venzee Technologies on January 8, 2025 and sell it today you would earn a total of 1.00 from holding Venzee Technologies or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Venzee Technologies
Performance |
| Timeline |
| General Motors |
| Venzee Technologies |
GM and Venzee Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Venzee Technologies
The main advantage of trading using opposite GM and Venzee Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Venzee Technologies 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 Venzee Technologies will offset losses from the drop in Venzee Technologies' long position.The idea behind General Motors and Venzee Technologies 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.| Venzee Technologies vs. Fintech Select | Venzee Technologies vs. LeoNovus | Venzee Technologies vs. Datametrex AI | Venzee Technologies vs. Identillect Technologies Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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