Correlation Between 3M and GENERAL
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By analyzing existing cross correlation between 3M Company and GENERAL ELEC CAP, you can compare the effects of market volatilities on 3M and GENERAL 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 3M with a short position of GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M and GENERAL.
Diversification Opportunities for 3M and GENERAL
Very good diversification
The 3 months correlation between 3M and GENERAL is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding 3M Company and GENERAL ELEC CAP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENERAL ELEC CAP and 3M 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 3M Company are associated (or correlated) with GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENERAL ELEC CAP has no effect on the direction of 3M i.e., 3M and GENERAL go up and down completely randomly.
Pair Corralation between 3M and GENERAL
Considering the 90-day investment horizon 3M Company is expected to generate 1.05 times more return on investment than GENERAL. However, 3M is 1.05 times more volatile than GENERAL ELEC CAP. It trades about 0.04 of its potential returns per unit of risk. GENERAL ELEC CAP is currently generating about 0.01 per unit of risk. If you would invest 9,666 in 3M Company on August 31, 2024 and sell it today you would earn a total of 3,582 from holding 3M Company or generate 37.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 33.13% |
| Values | Daily Returns |
3M Company vs. GENERAL ELEC CAP
Performance |
| Timeline |
| 3M Company |
| GENERAL ELEC CAP |
3M and GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3M and GENERAL
The main advantage of trading using opposite 3M and GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M position performs unexpectedly, GENERAL 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 GENERAL will offset losses from the drop in GENERAL's long position.| 3M vs. MDU Resources Group | 3M vs. Valmont Industries | 3M vs. Griffon | 3M vs. Compass Diversified Holdings |
| GENERAL vs. AMREP | GENERAL vs. Udemy Inc | GENERAL vs. Ihuman Inc | GENERAL vs. Peoples Educational Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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