Correlation Between GM and Pioneer Strategic
Can any of the company-specific risk be diversified away by investing in both GM and Pioneer Strategic 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 Pioneer Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Pioneer Strategic Income, you can compare the effects of market volatilities on GM and Pioneer Strategic 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 Pioneer Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Pioneer Strategic.
Diversification Opportunities for GM and Pioneer Strategic
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Pioneer is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Pioneer Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Strategic Income 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 Pioneer Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Strategic Income has no effect on the direction of GM i.e., GM and Pioneer Strategic go up and down completely randomly.
Pair Corralation between GM and Pioneer Strategic
Allowing for the 90-day total investment horizon General Motors is expected to generate 8.06 times more return on investment than Pioneer Strategic. However, GM is 8.06 times more volatile than Pioneer Strategic Income. It trades about 0.07 of its potential returns per unit of risk. Pioneer Strategic Income is currently generating about -0.19 per unit of risk. If you would invest 4,796 in General Motors on September 24, 2024 and sell it today you would earn a total of 460.00 from holding General Motors or generate 9.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.46% |
Values | Daily Returns |
General Motors vs. Pioneer Strategic Income
Performance |
Timeline |
General Motors |
Pioneer Strategic Income |
GM and Pioneer Strategic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GM and Pioneer Strategic
The main advantage of trading using opposite GM and Pioneer Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Pioneer Strategic 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 Pioneer Strategic will offset losses from the drop in Pioneer Strategic's long position.The idea behind General Motors and Pioneer Strategic Income 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.Pioneer Strategic vs. Qs Moderate Growth | Pioneer Strategic vs. Mid Cap Growth | Pioneer Strategic vs. Praxis Growth Index | Pioneer Strategic vs. Qs Growth Fund |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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