Correlation Between GM and Source MSCI
Can any of the company-specific risk be diversified away by investing in both GM and Source MSCI 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 Source MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Source MSCI Europe, you can compare the effects of market volatilities on GM and Source MSCI 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 Source MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Source MSCI.
Diversification Opportunities for GM and Source MSCI
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Source is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Source MSCI Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Source MSCI Europe 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 Source MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Source MSCI Europe has no effect on the direction of GM i.e., GM and Source MSCI go up and down completely randomly.
Pair Corralation between GM and Source MSCI
If you would invest 4,646 in General Motors on September 29, 2024 and sell it today you would earn a total of 782.00 from holding General Motors or generate 16.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
General Motors vs. Source MSCI Europe
Performance |
Timeline |
General Motors |
Source MSCI Europe |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Source MSCI Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GM and Source MSCI
The main advantage of trading using opposite GM and Source MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Source MSCI 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 Source MSCI will offset losses from the drop in Source MSCI's long position.The idea behind General Motors and Source MSCI Europe 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.Source MSCI vs. Source JPX Nikkei 400 | Source MSCI vs. Source Markets plc | Source MSCI vs. Source Markets plc | Source MSCI vs. Source Markets plc |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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