Correlation Between GM and Issachar Fund

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

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

Diversification Opportunities for GM and Issachar Fund

0.49

Correlation Coefficient

GM  Issachar Fund

Very weak diversification

The 3 months correlation between GM and Issachar is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Issachar Fund Issachar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Issachar Fund Issachar 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 Issachar Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Issachar Fund Issachar has no effect on the direction of GM i.e., GM and Issachar Fund go up and down completely randomly.

Pair Corralation between GM and Issachar Fund

Allowing for the 90-day total investment horizon General Motors is expected to generate 1.29 times more return on investment than Issachar Fund. However, GM is 1.29 times more volatile than Issachar Fund Issachar. It trades about -0.11 of its potential returns per unit of risk. Issachar Fund Issachar is currently generating about -0.27 per unit of risk. If you would invest  5,224  in General Motors on October 16, 2024 and sell it today you would lose (231.00) from holding General Motors or give up 4.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

General Motors  vs.  Issachar Fund Issachar

General Motors

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Issachar Fund Issachar

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Issachar Fund Issachar has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Issachar Fund 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 Issachar Fund

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

The idea behind General Motors and Issachar Fund Issachar 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.