Correlation Between GM and Minehub Technologies

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

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

Diversification Opportunities for GM and Minehub Technologies

-0.67

Correlation Coefficient

GM  Minehub Technologies

Excellent diversification

The 3 months correlation between GM and Minehub is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Minehub Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minehub Technologies 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 Minehub Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minehub Technologies has no effect on the direction of GM i.e., GM and Minehub Technologies go up and down completely randomly.

Pair Corralation between GM and Minehub Technologies

Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Minehub Technologies. But the stock apears to be less risky and, when comparing its historical volatility, General Motors is 2.94 times less risky than Minehub Technologies. The stock trades about -0.01 of its potential returns per unit of risk. The Minehub Technologies is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  28.00  in Minehub Technologies on December 19, 2024 and sell it today you would earn a total of  41.00  from holding Minehub Technologies or generate 146.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

General Motors  vs.  Minehub Technologies

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.

Minehub Technologies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Minehub Technologies are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Minehub Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GM and Minehub Technologies

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

The idea behind General Motors and Minehub Technologies 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.