Correlation Between GM and YouGov Plc
Can any of the company-specific risk be diversified away by investing in both GM and YouGov Plc 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 YouGov Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and YouGov plc, you can compare the effects of market volatilities on GM and YouGov Plc 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 YouGov Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and YouGov Plc.
Diversification Opportunities for GM and YouGov Plc
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between GM and YouGov is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and YouGov plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YouGov plc 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 YouGov Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YouGov plc has no effect on the direction of GM i.e., GM and YouGov Plc go up and down completely randomly.
Pair Corralation between GM and YouGov Plc
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.48 times more return on investment than YouGov Plc. However, General Motors is 2.1 times less risky than YouGov Plc. It trades about -0.1 of its potential returns per unit of risk. YouGov plc is currently generating about -0.1 per unit of risk. If you would invest 5,492 in General Motors on October 3, 2024 and sell it today you would lose (165.00) from holding General Motors or give up 3.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 90.48% |
Values | Daily Returns |
General Motors vs. YouGov plc
Performance |
Timeline |
General Motors |
YouGov plc |
GM and YouGov Plc Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GM and YouGov Plc
The main advantage of trading using opposite GM and YouGov Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, YouGov Plc 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 YouGov Plc will offset losses from the drop in YouGov Plc's long position.The idea behind General Motors and YouGov plc 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.YouGov Plc vs. Chiba Bank | YouGov Plc vs. Regions Financial | YouGov Plc vs. ANGLER GAMING PLC | YouGov Plc vs. FUTURE GAMING GRP |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Transaction History View history of all your transactions and understand their impact on performance | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |