Correlation Between GM and Riza Akin

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

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

Diversification Opportunities for GM and Riza Akin

-0.2

Correlation Coefficient

GM  Riza Akin

Good diversification

The 3 months correlation between GM and Riza is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Riza Akin Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riza Akin Fundo 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 Riza Akin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riza Akin Fundo has no effect on the direction of GM i.e., GM and Riza Akin go up and down completely randomly.

Pair Corralation between GM and Riza Akin

Allowing for the 90-day total investment horizon General Motors is expected to generate 2.95 times more return on investment than Riza Akin. However, GM is 2.95 times more volatile than Riza Akin Fundo. It trades about 0.09 of its potential returns per unit of risk. Riza Akin Fundo is currently generating about -0.21 per unit of risk. If you would invest  4,676  in General Motors on September 16, 2024 and sell it today you would earn a total of  577.00  from holding General Motors or generate 12.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

General Motors  vs.  Riza Akin Fundo

General Motors

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 6 (%) 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.

Riza Akin Fundo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Riza Akin Fundo has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with GM and Riza Akin

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

The idea behind General Motors and Riza Akin Fundo 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.