Correlation Between GM and RUECKER IMMOBILIEN

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

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

Diversification Opportunities for GM and RUECKER IMMOBILIEN

0.0

Correlation Coefficient

GM  RUECKER IMMOBILIEN

Pay attention - limited upside

The 3 months correlation between GM and RUECKER is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and RUECKER IMMOBILIEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RUECKER IMMOBILIEN 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 RUECKER IMMOBILIEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RUECKER IMMOBILIEN has no effect on the direction of GM i.e., GM and RUECKER IMMOBILIEN go up and down completely randomly.

Pair Corralation between GM and RUECKER IMMOBILIEN

Allowing for the 90-day total investment horizon General Motors is expected to generate 0.33 times more return on investment than RUECKER IMMOBILIEN. However, General Motors is 3.03 times less risky than RUECKER IMMOBILIEN. It trades about 0.05 of its potential returns per unit of risk. RUECKER IMMOBILIEN is currently generating about -0.04 per unit of risk. If you would invest  3,353  in General Motors on December 5, 2024 and sell it today you would earn a total of  1,385  from holding General Motors or generate 41.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

General Motors  vs.  RUECKER IMMOBILIEN

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 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.

RUECKER IMMOBILIEN

Risk-Adjusted Performance

Very Weak

Over the last 90 days RUECKER IMMOBILIEN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, RUECKER IMMOBILIEN is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with GM and RUECKER IMMOBILIEN

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

The idea behind General Motors and RUECKER IMMOBILIEN 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.