Correlation Between GM and Exicure
Can any of the company-specific risk be diversified away by investing in both GM and Exicure 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 Exicure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Exicure, you can compare the effects of market volatilities on GM and Exicure 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 Exicure. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Exicure.
Diversification Opportunities for GM and Exicure
Very weak diversification
The 3 months correlation between GM and Exicure is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Exicure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exicure 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 Exicure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exicure has no effect on the direction of GM i.e., GM and Exicure go up and down completely randomly.
Pair Corralation between GM and Exicure
Allowing for the 90-day total investment horizon GM is expected to generate 30.14 times less return on investment than Exicure. But when comparing it to its historical volatility, General Motors is 10.01 times less risky than Exicure. It trades about 0.17 of its potential returns per unit of risk. Exicure is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 303.00 in Exicure on September 1, 2024 and sell it today you would earn a total of 2,646 from holding Exicure or generate 873.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Exicure
Performance |
| Timeline |
| General Motors |
| Exicure |
GM and Exicure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Exicure
The main advantage of trading using opposite GM and Exicure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Exicure 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 Exicure will offset losses from the drop in Exicure's long position.The idea behind General Motors and Exicure 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.| Exicure vs. Ikena Oncology | Exicure vs. Eliem Therapeutics | Exicure vs. HCW Biologics | Exicure vs. RenovoRx |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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