Correlation Between Science In and General Motors
Can any of the company-specific risk be diversified away by investing in both Science In and General Motors 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 Science In and General Motors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Science in Sport and General Motors Co, you can compare the effects of market volatilities on Science In and General Motors 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 Science In with a short position of General Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Science In and General Motors.
Diversification Opportunities for Science In and General Motors
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Science and General is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Science in Sport and General Motors Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Motors and Science In 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 Science in Sport are associated (or correlated) with General Motors. 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 Science In i.e., Science In and General Motors go up and down completely randomly.
Pair Corralation between Science In and General Motors
Assuming the 90 days trading horizon Science In is expected to generate 18.41 times less return on investment than General Motors. But when comparing it to its historical volatility, Science in Sport is 1.69 times less risky than General Motors. It trades about 0.01 of its potential returns per unit of risk. General Motors Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,180 in General Motors Co on October 24, 2024 and sell it today you would earn a total of 160.00 from holding General Motors Co or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Science in Sport vs. General Motors Co
Performance |
| Timeline |
| Science in Sport |
| General Motors |
Science In and General Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Science In and General Motors
The main advantage of trading using opposite Science In and General Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Science In position performs unexpectedly, General Motors 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 Motors will offset losses from the drop in General Motors' long position.| Science In vs. Sparebank 1 SR | Science In vs. PureTech Health plc | Science In vs. Berner Kantonalbank AG | Science In vs. Scandic Hotels Group |
| General Motors vs. UNIQA Insurance Group | General Motors vs. Alien Metals | General Motors vs. Gaztransport et Technigaz | General Motors vs. Sparebank 1 SR |
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 Directory module to find actively traded commodities issued by global exchanges.
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