Correlation Between GM and Brack Capit
Can any of the company-specific risk be diversified away by investing in both GM and Brack Capit 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 Brack Capit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Brack Capit N, you can compare the effects of market volatilities on GM and Brack Capit 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 Brack Capit. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Brack Capit.
Diversification Opportunities for GM and Brack Capit
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GM and Brack is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Brack Capit N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brack Capit N 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 Brack Capit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brack Capit N has no effect on the direction of GM i.e., GM and Brack Capit go up and down completely randomly.
Pair Corralation between GM and Brack Capit
Allowing for the 90-day total investment horizon GM is expected to generate 1.72 times less return on investment than Brack Capit. But when comparing it to its historical volatility, General Motors is 2.05 times less risky than Brack Capit. It trades about 0.21 of its potential returns per unit of risk. Brack Capit N is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,870,000 in Brack Capit N on January 25, 2024 and sell it today you would earn a total of 330,000 from holding Brack Capit N or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
General Motors vs. Brack Capit N
Performance |
| Timeline |
| General Motors |
| Brack Capit N |
GM and Brack Capit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Brack Capit
The main advantage of trading using opposite GM and Brack Capit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Brack Capit 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 Brack Capit will offset losses from the drop in Brack Capit's long position.The idea behind General Motors and Brack Capit N 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.| Brack Capit vs. Magic Software Enterprises | Brack Capit vs. Big Tech 50 | Brack Capit vs. Galileo Tech | Brack Capit vs. Sofwave Medical |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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