Correlation Between GM and Mercedes Benz
Can any of the company-specific risk be diversified away by investing in both GM and Mercedes Benz 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 Mercedes Benz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Mercedes Benz Group, you can compare the effects of market volatilities on GM and Mercedes Benz 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 Mercedes Benz. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Mercedes Benz.
Diversification Opportunities for GM and Mercedes Benz
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Mercedes is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Mercedes Benz Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercedes Benz Group 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 Mercedes Benz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercedes Benz Group has no effect on the direction of GM i.e., GM and Mercedes Benz go up and down completely randomly.
Pair Corralation between GM and Mercedes Benz
If you would invest 3,797 in General Motors on January 17, 2024 and sell it today you would earn a total of 472.00 from holding General Motors or generate 12.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
General Motors vs. Mercedes Benz Group
Performance |
| Timeline |
| General Motors |
| Mercedes Benz Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Mercedes Benz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Mercedes Benz
The main advantage of trading using opposite GM and Mercedes Benz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Mercedes Benz 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 Mercedes Benz will offset losses from the drop in Mercedes Benz's long position.| GM vs. Hycroft Mining Holding | GM vs. Exela Technologies | GM vs. Aquagold International | GM vs. Thrivent High Yield |
| Mercedes Benz vs. Lincoln Electric Holdings | Mercedes Benz vs. Skechers USA | Mercedes Benz vs. Eastern Co | Mercedes Benz vs. GameStop 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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