Correlation Between GM and Xvivo Perfusion
Can any of the company-specific risk be diversified away by investing in both GM and Xvivo Perfusion 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 Xvivo Perfusion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Xvivo Perfusion AB, you can compare the effects of market volatilities on GM and Xvivo Perfusion 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 Xvivo Perfusion. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Xvivo Perfusion.
Diversification Opportunities for GM and Xvivo Perfusion
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Xvivo is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Xvivo Perfusion AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xvivo Perfusion AB 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 Xvivo Perfusion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xvivo Perfusion AB has no effect on the direction of GM i.e., GM and Xvivo Perfusion go up and down completely randomly.
Pair Corralation between GM and Xvivo Perfusion
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.33 times more return on investment than Xvivo Perfusion. However, GM is 1.33 times more volatile than Xvivo Perfusion AB. It trades about 0.09 of its potential returns per unit of risk. Xvivo Perfusion AB is currently generating about -0.15 per unit of risk. If you would invest 5,273 in General Motors on August 29, 2024 and sell it today you would earn a total of 277.00 from holding General Motors or generate 5.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Xvivo Perfusion AB
Performance |
| Timeline |
| General Motors |
| Xvivo Perfusion AB |
GM and Xvivo Perfusion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Xvivo Perfusion
The main advantage of trading using opposite GM and Xvivo Perfusion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Xvivo Perfusion 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 Xvivo Perfusion will offset losses from the drop in Xvivo Perfusion's long position.The idea behind General Motors and Xvivo Perfusion AB 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.| Xvivo Perfusion vs. Vitrolife AB | Xvivo Perfusion vs. BioArctic AB | Xvivo Perfusion vs. CellaVision AB | Xvivo Perfusion vs. Invisio Communications AB |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |