Correlation Between GM and Immo Moury

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

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

Diversification Opportunities for GM and Immo Moury

0.0

Correlation Coefficient

GM  Immo Moury

Pay attention - limited upside

The 3 months correlation between GM and Immo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Immo Moury SICAF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immo Moury SICAF 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 Immo Moury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immo Moury SICAF has no effect on the direction of GM i.e., GM and Immo Moury go up and down completely randomly.

Pair Corralation between GM and Immo Moury

Allowing for the 90-day total investment horizon General Motors is expected to generate 1.85 times more return on investment than Immo Moury. However, GM is 1.85 times more volatile than Immo Moury SICAF. It trades about -0.01 of its potential returns per unit of risk. Immo Moury SICAF is currently generating about -0.04 per unit of risk. If you would invest  5,404  in General Motors on December 26, 2024 and sell it today you would lose (145.00) from holding General Motors or give up 2.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

General Motors  vs.  Immo Moury SICAF

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 very healthy primary indicators, GM is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Immo Moury SICAF

Risk-Adjusted Performance

Very Weak

Over the last 90 days Immo Moury SICAF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Immo Moury is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GM and Immo Moury

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

The idea behind General Motors and Immo Moury SICAF 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.