Correlation Between GM and Gtsi Corp

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

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

Diversification Opportunities for GM and Gtsi Corp

0.0

Correlation Coefficient

GM  Gtsi Corp

Pay attention - limited upside

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

Pair Corralation between GM and Gtsi Corp

If you would invest  4,741  in General Motors on September 17, 2024 and sell it today you would earn a total of  483.00  from holding General Motors or generate 10.19% return on investment over 90 days.

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

General Motors  vs.  Gtsi Corp

General Motors

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, GM may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Gtsi Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gtsi Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Gtsi Corp is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with GM and Gtsi Corp

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

The idea behind General Motors and Gtsi Corp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.