Correlation Between GM and Aloro Mining
Can any of the company-specific risk be diversified away by investing in both GM and Aloro Mining 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 Aloro Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Aloro Mining Corp, you can compare the effects of market volatilities on GM and Aloro Mining 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 Aloro Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Aloro Mining.
Diversification Opportunities for GM and Aloro Mining
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between GM and Aloro is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Aloro Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aloro Mining 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 Aloro Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aloro Mining Corp has no effect on the direction of GM i.e., GM and Aloro Mining go up and down completely randomly.
Pair Corralation between GM and Aloro Mining
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Aloro Mining. In addition to that, GM is 5.08 times more volatile than Aloro Mining Corp. It trades about -0.14 of its total potential returns per unit of risk. Aloro Mining Corp is currently generating about 0.21 per unit of volatility. If you would invest 0.42 in Aloro Mining Corp on September 13, 2024 and sell it today you would earn a total of 0.01 from holding Aloro Mining Corp or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
General Motors vs. Aloro Mining Corp
Performance |
| Timeline |
| General Motors |
| Aloro Mining Corp |
GM and Aloro Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Aloro Mining
The main advantage of trading using opposite GM and Aloro Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Aloro Mining 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 Aloro Mining will offset losses from the drop in Aloro Mining's long position.The idea behind General Motors and Aloro Mining 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.| Aloro Mining vs. Antioquia Gold | Aloro Mining vs. Antilles Gold Limited | Aloro Mining vs. Asante Gold | Aloro Mining vs. Bluestone Resources |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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