Correlation Between GM and STRYKER
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By analyzing existing cross correlation between General Motors and STRYKER P 365, you can compare the effects of market volatilities on GM and STRYKER 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 STRYKER. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and STRYKER.
Diversification Opportunities for GM and STRYKER
Very good diversification
The 3 months correlation between GM and STRYKER is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and STRYKER P 365 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRYKER P 365 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 STRYKER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRYKER P 365 has no effect on the direction of GM i.e., GM and STRYKER go up and down completely randomly.
Pair Corralation between GM and STRYKER
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the STRYKER. In addition to that, GM is 2.99 times more volatile than STRYKER P 365. It trades about -0.31 of its total potential returns per unit of risk. STRYKER P 365 is currently generating about -0.09 per unit of volatility. If you would invest 9,712 in STRYKER P 365 on September 24, 2024 and sell it today you would lose (142.00) from holding STRYKER P 365 or give up 1.46% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.24% |
Values | Daily Returns |
General Motors vs. STRYKER P 365
Performance |
Timeline |
General Motors |
STRYKER P 365 |
GM and STRYKER Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GM and STRYKER
The main advantage of trading using opposite GM and STRYKER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, STRYKER 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 STRYKER will offset losses from the drop in STRYKER's long position.The idea behind General Motors and STRYKER P 365 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.STRYKER vs. AEP TEX INC | STRYKER vs. US BANK NATIONAL | STRYKER vs. Brightsphere Investment Group | STRYKER vs. Neurocrine Biosciences |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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