Correlation Between GM and NanoTech Gaming

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both GM and NanoTech Gaming 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 NanoTech Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and NanoTech Gaming, you can compare the effects of market volatilities on GM and NanoTech Gaming 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 NanoTech Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and NanoTech Gaming.

Diversification Opportunities for GM and NanoTech Gaming

0.14
  Correlation Coefficient

Average diversification

The 3 months correlation between GM and NanoTech is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and NanoTech Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NanoTech Gaming 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 NanoTech Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NanoTech Gaming has no effect on the direction of GM i.e., GM and NanoTech Gaming go up and down completely randomly.

Pair Corralation between GM and NanoTech Gaming

If you would invest  4,855  in General Motors on September 18, 2024 and sell it today you would earn a total of  259.00  from holding General Motors or generate 5.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

General Motors  vs.  NanoTech Gaming

 Performance 
       Timeline  
General Motors 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 3 (%) 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.
NanoTech Gaming 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days NanoTech Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, NanoTech Gaming is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

GM and NanoTech Gaming Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GM and NanoTech Gaming

The main advantage of trading using opposite GM and NanoTech Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, NanoTech Gaming 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 NanoTech Gaming will offset losses from the drop in NanoTech Gaming's long position.
The idea behind General Motors and NanoTech Gaming 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.
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

Other Complementary Tools

Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk