Correlation Between GM and AnGes

Can any of the company-specific risk be diversified away by investing in both GM and AnGes 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 AnGes into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between General Motors and AnGes Inc, you can compare the effects of market volatilities on GM and AnGes 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 AnGes. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and AnGes.

Diversification Opportunities for GM and AnGes

0.0

Correlation Coefficient

GM  AnGes

Pay attention - limited upside

The 3 months correlation between GM and AnGes is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and AnGes Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AnGes Inc 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 AnGes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AnGes Inc has no effect on the direction of GM i.e., GM and AnGes go up and down completely randomly.

Pair Corralation between GM and AnGes

If you would invest (100.00) in AnGes Inc on February 3, 2024 and sell it today you would earn a total of  100.00  from holding AnGes Inc or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

General Motors  vs.  AnGes Inc

General Motors

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, GM displayed solid returns over the last few months and may actually be approaching a breakup point.

AnGes Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AnGes Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, AnGes is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with GM and AnGes

The main advantage of trading using opposite GM and AnGes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, AnGes 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 AnGes will offset losses from the drop in AnGes' long position.

The idea behind General Motors and AnGes Inc 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.