Correlation Between GM and PROCIMMO RESIDENTIAL

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

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

Diversification Opportunities for GM and PROCIMMO RESIDENTIAL

-0.01

Correlation Coefficient

GM  PROCIMMO RESIDENTIAL

Good diversification

The 3 months correlation between GM and PROCIMMO is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and PROCIMMO RESIDENTIAL LEMANIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PROCIMMO RESIDENTIAL 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 PROCIMMO RESIDENTIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PROCIMMO RESIDENTIAL has no effect on the direction of GM i.e., GM and PROCIMMO RESIDENTIAL go up and down completely randomly.

Pair Corralation between GM and PROCIMMO RESIDENTIAL

Allowing for the 90-day total investment horizon General Motors is expected to generate 2.12 times more return on investment than PROCIMMO RESIDENTIAL. However, GM is 2.12 times more volatile than PROCIMMO RESIDENTIAL LEMANIC. It trades about 0.05 of its potential returns per unit of risk. PROCIMMO RESIDENTIAL LEMANIC is currently generating about 0.01 per unit of risk. If you would invest  3,517  in General Motors on September 29, 2024 and sell it today you would earn a total of  1,911  from holding General Motors or generate 54.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

General Motors  vs.  PROCIMMO RESIDENTIAL LEMANIC

General Motors

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, GM displayed solid returns over the last few months and may actually be approaching a breakup point.

PROCIMMO RESIDENTIAL

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PROCIMMO RESIDENTIAL LEMANIC are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable basic indicators, PROCIMMO RESIDENTIAL is not utilizing all of its potentials. The new stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with GM and PROCIMMO RESIDENTIAL

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

The idea behind General Motors and PROCIMMO RESIDENTIAL LEMANIC 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.