Correlation Between GM and Zapata Computing
Can any of the company-specific risk be diversified away by investing in both GM and Zapata Computing 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 Zapata Computing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Zapata Computing Holdings, you can compare the effects of market volatilities on GM and Zapata Computing 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 Zapata Computing. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Zapata Computing.
Diversification Opportunities for GM and Zapata Computing
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Zapata is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Zapata Computing Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zapata Computing Holdings 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 Zapata Computing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zapata Computing Holdings has no effect on the direction of GM i.e., GM and Zapata Computing go up and down completely randomly.
Pair Corralation between GM and Zapata Computing
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.13 times more return on investment than Zapata Computing. However, General Motors is 7.87 times less risky than Zapata Computing. It trades about 0.1 of its potential returns per unit of risk. Zapata Computing Holdings is currently generating about -0.27 per unit of risk. If you would invest 4,829 in General Motors on September 2, 2024 and sell it today you would earn a total of 730.00 from holding General Motors or generate 15.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 70.31% |
Values | Daily Returns |
General Motors vs. Zapata Computing Holdings
Performance |
Timeline |
General Motors |
Zapata Computing Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Zapata Computing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GM and Zapata Computing
The main advantage of trading using opposite GM and Zapata Computing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Zapata Computing 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 Zapata Computing will offset losses from the drop in Zapata Computing's long position.The idea behind General Motors and Zapata Computing Holdings 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.Zapata Computing vs. Origin Materials | Zapata Computing vs. Vita Coco | Zapata Computing vs. The Mosaic | Zapata Computing vs. Vodka Brands Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
FinTech Suite Use AI to screen and filter profitable investment opportunities |