Correlation Between Contagious Gaming and GM
Can any of the company-specific risk be diversified away by investing in both Contagious Gaming and GM 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 Contagious Gaming and GM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Contagious Gaming and General Motors, you can compare the effects of market volatilities on Contagious Gaming and GM 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 Contagious Gaming with a short position of GM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Contagious Gaming and GM.
Diversification Opportunities for Contagious Gaming and GM
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Contagious and GM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Contagious Gaming and General Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Motors and Contagious Gaming 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 Contagious Gaming are associated (or correlated) with GM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Motors has no effect on the direction of Contagious Gaming i.e., Contagious Gaming and GM go up and down completely randomly.
Pair Corralation between Contagious Gaming and GM
Assuming the 90 days horizon Contagious Gaming is expected to under-perform the GM. In addition to that, Contagious Gaming is 2.48 times more volatile than General Motors. It trades about -0.06 of its total potential returns per unit of risk. General Motors is currently generating about 0.07 per unit of volatility. If you would invest 3,536 in General Motors on August 31, 2024 and sell it today you would earn a total of 2,023 from holding General Motors or generate 57.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Contagious Gaming vs. General Motors
Performance |
| Timeline |
| Contagious Gaming |
| General Motors |
Contagious Gaming and GM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Contagious Gaming and GM
The main advantage of trading using opposite Contagious Gaming and GM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contagious Gaming position performs unexpectedly, GM 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 GM will offset losses from the drop in GM's long position.| Contagious Gaming vs. Porsche Automobile Holding | Contagious Gaming vs. Ferrari NV | Contagious Gaming vs. Toyota Motor | Contagious Gaming vs. General Motors |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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