Correlation Between GM and 325 ALLIANZ

Can any of the company-specific risk be diversified away by investing in both GM and 325 ALLIANZ 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 325 ALLIANZ into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between General Motors and 325 ALLIANZ OPEN, you can compare the effects of market volatilities on GM and 325 ALLIANZ 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 325 ALLIANZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and 325 ALLIANZ.

Diversification Opportunities for GM and 325 ALLIANZ

0.0

Correlation Coefficient

GM  325 ALLIANZ

Pay attention - limited upside

The 3 months correlation between GM and 325 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and 325 ALLIANZ OPEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 325 ALLIANZ OPEN 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 325 ALLIANZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 325 ALLIANZ OPEN has no effect on the direction of GM i.e., GM and 325 ALLIANZ go up and down completely randomly.

Pair Corralation between GM and 325 ALLIANZ

If you would invest (100.00) in 325 ALLIANZ OPEN on September 15, 2024 and sell it today you would earn a total of  100.00  from holding 325 ALLIANZ OPEN or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

General Motors  vs.  325 ALLIANZ OPEN

General Motors

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, GM displayed solid returns over the last few months and may actually be approaching a breakup point.

325 ALLIANZ OPEN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 325 ALLIANZ OPEN has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, 325 ALLIANZ is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GM and 325 ALLIANZ

The main advantage of trading using opposite GM and 325 ALLIANZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, 325 ALLIANZ 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 325 ALLIANZ will offset losses from the drop in 325 ALLIANZ's long position.

The idea behind General Motors and 325 ALLIANZ OPEN 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.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.