Correlation Between GM and Winland Holdings
Can any of the company-specific risk be diversified away by investing in both GM and Winland Holdings 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 Winland Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Winland Holdings, you can compare the effects of market volatilities on GM and Winland Holdings 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 Winland Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Winland Holdings.
Diversification Opportunities for GM and Winland Holdings
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Winland is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Winland Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winland Holdings 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 Winland Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winland Holdings has no effect on the direction of GM i.e., GM and Winland Holdings go up and down completely randomly.
Pair Corralation between GM and Winland Holdings
If you would invest 4,484 in General Motors on August 31, 2024 and sell it today you would earn a total of 1,066 from holding General Motors or generate 23.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 2.27% |
| Values | Daily Returns |
General Motors vs. Winland Holdings
Performance |
| Timeline |
| General Motors |
| Winland Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Winland Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Winland Holdings
The main advantage of trading using opposite GM and Winland Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Winland Holdings 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 Winland Holdings will offset losses from the drop in Winland Holdings' long position.The idea behind General Motors and Winland Holdings 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |