Correlation Between GM and PolyPlank Publ

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

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

Diversification Opportunities for GM and PolyPlank Publ

0.63

Correlation Coefficient

GM  PolyPlank Publ

Poor diversification

The 3 months correlation between GM and PolyPlank is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and PolyPlank publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PolyPlank publ AB 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 PolyPlank Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PolyPlank publ AB has no effect on the direction of GM i.e., GM and PolyPlank Publ go up and down completely randomly.

Pair Corralation between GM and PolyPlank Publ

Allowing for the 90-day total investment horizon General Motors is expected to generate 0.31 times more return on investment than PolyPlank Publ. However, General Motors is 3.24 times less risky than PolyPlank Publ. It trades about -0.01 of its potential returns per unit of risk. PolyPlank publ AB is currently generating about -0.01 per unit of risk. If you would invest  5,404  in General Motors on December 25, 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	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

General Motors  vs.  PolyPlank publ AB

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.

PolyPlank publ AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days PolyPlank publ AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, PolyPlank Publ is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GM and PolyPlank Publ

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

The idea behind General Motors and PolyPlank publ AB 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..