Correlation Between GM and Voltage Metals
Can any of the company-specific risk be diversified away by investing in both GM and Voltage Metals 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 Voltage Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Voltage Metals Corp, you can compare the effects of market volatilities on GM and Voltage Metals 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 Voltage Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Voltage Metals.
Diversification Opportunities for GM and Voltage Metals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Voltage is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Voltage Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voltage Metals Corp 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 Voltage Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voltage Metals Corp has no effect on the direction of GM i.e., GM and Voltage Metals go up and down completely randomly.
Pair Corralation between GM and Voltage Metals
If you would invest 5,076 in General Motors on September 1, 2024 and sell it today you would earn a total of 483.00 from holding General Motors or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Voltage Metals Corp
Performance |
| Timeline |
| General Motors |
| Voltage Metals Corp |
GM and Voltage Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Voltage Metals
The main advantage of trading using opposite GM and Voltage Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Voltage Metals 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 Voltage Metals will offset losses from the drop in Voltage Metals' long position.The idea behind General Motors and Voltage Metals Corp 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.| Voltage Metals vs. ATT Inc | Voltage Metals vs. Merck Company | Voltage Metals vs. Walt Disney | Voltage Metals vs. Caterpillar |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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