Correlation Between GM and Rezolve AI

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

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

Diversification Opportunities for GM and Rezolve AI

-0.55

Correlation Coefficient

GM  Rezolve AI

Excellent diversification

The 3 months correlation between GM and Rezolve is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Rezolve AI Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rezolve AI Limited 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 Rezolve AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rezolve AI Limited has no effect on the direction of GM i.e., GM and Rezolve AI go up and down completely randomly.

Pair Corralation between GM and Rezolve AI

Allowing for the 90-day total investment horizon GM is expected to generate 33.47 times less return on investment than Rezolve AI. But when comparing it to its historical volatility, General Motors is 10.09 times less risky than Rezolve AI. It trades about 0.03 of its potential returns per unit of risk. Rezolve AI Limited is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Rezolve AI Limited on November 19, 2024 and sell it today you would earn a total of  54.80  from holding Rezolve AI Limited or generate 498.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	79.03%
Values	Daily Returns

General Motors  vs.  Rezolve AI Limited

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.

Rezolve AI Limited

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rezolve AI Limited are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Rezolve AI showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GM and Rezolve AI

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

The idea behind General Motors and Rezolve AI Limited 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.