Correlation Between GM and Victory Energy
Can any of the company-specific risk be diversified away by investing in both GM and Victory Energy 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 Victory Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Victory Energy Corp, you can compare the effects of market volatilities on GM and Victory Energy 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 Victory Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Victory Energy.
Diversification Opportunities for GM and Victory Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Victory is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Victory Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Energy 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 Victory Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Energy Corp has no effect on the direction of GM i.e., GM and Victory Energy go up and down completely randomly.
Pair Corralation between GM and Victory Energy
If you would invest 4,935 in General Motors on August 29, 2024 and sell it today you would earn a total of 544.00 from holding General Motors or generate 11.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
General Motors vs. Victory Energy Corp
Performance |
| Timeline |
| General Motors |
| Victory Energy Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
GM and Victory Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Victory Energy
The main advantage of trading using opposite GM and Victory Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Victory Energy 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 Victory Energy will offset losses from the drop in Victory Energy's long position.The idea behind General Motors and Victory Energy 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.| Victory Energy vs. Halliburton | Victory Energy vs. High Arctic Energy | Victory Energy vs. Total Energy Services | Victory Energy vs. Dawson Geophysical |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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