Correlation Between GM and 91324PEQ1

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both GM and 91324PEQ1 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 91324PEQ1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and UNH 53 15 FEB 30, you can compare the effects of market volatilities on GM and 91324PEQ1 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 91324PEQ1. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and 91324PEQ1.

Diversification Opportunities for GM and 91324PEQ1

GM91324PEQ1Diversified AwayGM91324PEQ1Diversified Away100%
-0.63
  Correlation Coefficient

Excellent diversification

The 3 months correlation between GM and 91324PEQ1 is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and UNH 53 15 FEB 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNH 53 15 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 91324PEQ1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNH 53 15 has no effect on the direction of GM i.e., GM and 91324PEQ1 go up and down completely randomly.

Pair Corralation between GM and 91324PEQ1

Allowing for the 90-day total investment horizon General Motors is expected to generate 8.91 times more return on investment than 91324PEQ1. However, GM is 8.91 times more volatile than UNH 53 15 FEB 30. It trades about 0.05 of its potential returns per unit of risk. UNH 53 15 FEB 30 is currently generating about -0.25 per unit of risk. If you would invest  4,855  in General Motors on September 18, 2024 and sell it today you would earn a total of  259.00  from holding General Motors or generate 5.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy96.88%
ValuesDaily Returns

General Motors  vs.  UNH 53 15 FEB 30

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -50510152025
JavaScript chart by amCharts 3.21.15GM 91324PEQ1
       Timeline  
General Motors 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, GM may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec45505560
UNH 53 15 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days UNH 53 15 FEB 30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 91324PEQ1 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.152323312325229899100101102103104105

GM and 91324PEQ1 Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.51-5.62-3.74-1.850.01.923.865.817.76 0.050.100.150.200.250.30
JavaScript chart by amCharts 3.21.15GM 91324PEQ1
       Returns  

Pair Trading with GM and 91324PEQ1

The main advantage of trading using opposite GM and 91324PEQ1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, 91324PEQ1 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 91324PEQ1 will offset losses from the drop in 91324PEQ1's long position.
The idea behind General Motors and UNH 53 15 FEB 30 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.
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

Other Complementary Tools

Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Commodity Directory
Find actively traded commodities issued by global exchanges
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios