Correlation Between GM and 866677AF4

Can any of the company-specific risk be diversified away by investing in both GM and 866677AF4 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 866677AF4 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between General Motors and SUI 23 01 NOV 28, you can compare the effects of market volatilities on GM and 866677AF4 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 866677AF4. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and 866677AF4.

Diversification Opportunities for GM and 866677AF4

-0.22

Correlation Coefficient

GM  866677AF4

Very good diversification

The 3 months correlation between GM and 866677AF4 is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and SUI 23 01 NOV 28 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUI 23 01 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 866677AF4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUI 23 01 has no effect on the direction of GM i.e., GM and 866677AF4 go up and down completely randomly.

Pair Corralation between GM and 866677AF4

Allowing for the 90-day total investment horizon General Motors is expected to under-perform the 866677AF4. In addition to that, GM is 2.95 times more volatile than SUI 23 01 NOV 28. It trades about -0.21 of its total potential returns per unit of risk. SUI 23 01 NOV 28 is currently generating about -0.25 per unit of volatility. If you would invest  9,026  in SUI 23 01 NOV 28 on September 25, 2024 and sell it today you would lose (282.00) from holding SUI 23 01 NOV 28 or give up 3.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	71.43%
Values	Daily Returns

General Motors  vs.  SUI 23 01 NOV 28

General Motors

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 9 (%) 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.

SUI 23 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SUI 23 01 NOV 28 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 866677AF4 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 866677AF4

The main advantage of trading using opposite GM and 866677AF4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, 866677AF4 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 866677AF4 will offset losses from the drop in 866677AF4's long position.

The idea behind General Motors and SUI 23 01 NOV 28 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.