Correlation Between GM and MARRIOTT
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By analyzing existing cross correlation between General Motors and MARRIOTT INTL INC, you can compare the effects of market volatilities on GM and MARRIOTT 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 MARRIOTT. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and MARRIOTT.
Diversification Opportunities for GM and MARRIOTT
Significant diversification
The 3 months correlation between GM and MARRIOTT is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and MARRIOTT INTL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARRIOTT INTL INC 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 MARRIOTT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARRIOTT INTL INC has no effect on the direction of GM i.e., GM and MARRIOTT go up and down completely randomly.
Pair Corralation between GM and MARRIOTT
Allowing for the 90-day total investment horizon General Motors is expected to generate 6.24 times more return on investment than MARRIOTT. However, GM is 6.24 times more volatile than MARRIOTT INTL INC. It trades about 0.03 of its potential returns per unit of risk. MARRIOTT INTL INC is currently generating about -0.03 per unit of risk. If you would invest 4,718 in General Motors on October 13, 2024 and sell it today you would earn a total of 267.00 from holding General Motors or generate 5.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 96.5% |
Values | Daily Returns |
General Motors vs. MARRIOTT INTL INC
Performance |
Timeline |
General Motors |
MARRIOTT INTL INC |
GM and MARRIOTT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GM and MARRIOTT
The main advantage of trading using opposite GM and MARRIOTT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, MARRIOTT 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 MARRIOTT will offset losses from the drop in MARRIOTT's long position.The idea behind General Motors and MARRIOTT INTL INC 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.MARRIOTT vs. Molina Healthcare | MARRIOTT vs. Universal Insurance Holdings | MARRIOTT vs. Teradyne | MARRIOTT vs. Arm Holdings plc |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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