Correlation Between GM and Datagate Bilgisayar

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

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

Diversification Opportunities for GM and Datagate Bilgisayar

-0.64

Correlation Coefficient

GM  Datagate Bilgisayar

Excellent diversification

The 3 months correlation between GM and Datagate is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Datagate Bilgisayar Malzemeler in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datagate Bilgisayar 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 Datagate Bilgisayar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datagate Bilgisayar has no effect on the direction of GM i.e., GM and Datagate Bilgisayar go up and down completely randomly.

Pair Corralation between GM and Datagate Bilgisayar

Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Datagate Bilgisayar. But the stock apears to be less risky and, when comparing its historical volatility, General Motors is 1.6 times less risky than Datagate Bilgisayar. The stock trades about -0.06 of its potential returns per unit of risk. The Datagate Bilgisayar Malzemeleri is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  4,572  in Datagate Bilgisayar Malzemeleri on December 28, 2024 and sell it today you would earn a total of  628.00  from holding Datagate Bilgisayar Malzemeleri or generate 13.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

General Motors  vs.  Datagate Bilgisayar Malzemeler

General Motors

Risk-Adjusted Performance

Very Weak

Over the last 90 days General Motors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Datagate Bilgisayar

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Datagate Bilgisayar Malzemeleri are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Datagate Bilgisayar demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GM and Datagate Bilgisayar

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

The idea behind General Motors and Datagate Bilgisayar Malzemeleri 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.