Correlation Between GM and Nmb Financial

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both GM and Nmb Financial 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 Nmb Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Nmb Financial Corp, you can compare the effects of market volatilities on GM and Nmb Financial 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 Nmb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Nmb Financial.

Diversification Opportunities for GM and Nmb Financial

-0.51
  Correlation Coefficient

Excellent diversification

The 3 months correlation between GM and Nmb is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Nmb Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nmb Financial Corp 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 Nmb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nmb Financial Corp has no effect on the direction of GM i.e., GM and Nmb Financial go up and down completely randomly.

Pair Corralation between GM and Nmb Financial

Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Nmb Financial. In addition to that, GM is 39.65 times more volatile than Nmb Financial Corp. It trades about -0.01 of its total potential returns per unit of risk. Nmb Financial Corp is currently generating about 0.27 per unit of volatility. If you would invest  1,475  in Nmb Financial Corp on December 2, 2024 and sell it today you would earn a total of  4.00  from holding Nmb Financial Corp or generate 0.27% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.45%
ValuesDaily Returns

General Motors  vs.  Nmb Financial Corp

 Performance 
       Timeline  
General Motors 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
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.
Nmb Financial Corp 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Nmb Financial Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental drivers, Nmb Financial may actually be approaching a critical reversion point that can send shares even higher in April 2025.

GM and Nmb Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GM and Nmb Financial

The main advantage of trading using opposite GM and Nmb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Nmb Financial 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 Nmb Financial will offset losses from the drop in Nmb Financial's long position.
The idea behind General Motors and Nmb Financial Corp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

Other Complementary Tools

Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format