Correlation Between GM and Danske Invest
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By analyzing existing cross correlation between General Motors and Danske Invest , you can compare the effects of market volatilities on GM and Danske Invest 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 Danske Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Danske Invest.
Diversification Opportunities for GM and Danske Invest
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GM and Danske is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Danske Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Invest 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 Danske Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Invest has no effect on the direction of GM i.e., GM and Danske Invest go up and down completely randomly.
Pair Corralation between GM and Danske Invest
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.4 times more return on investment than Danske Invest. However, GM is 2.4 times more volatile than Danske Invest . It trades about 0.11 of its potential returns per unit of risk. Danske Invest is currently generating about 0.02 per unit of risk. If you would invest 4,355 in General Motors on January 25, 2024 and sell it today you would earn a total of 153.00 from holding General Motors or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 90.91% |
| Values | Daily Returns |
General Motors vs. Danske Invest
Performance |
| Timeline |
| General Motors |
| Danske Invest |
GM and Danske Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Danske Invest
The main advantage of trading using opposite GM and Danske Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Danske Invest 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 Danske Invest will offset losses from the drop in Danske Invest's long position.The idea behind General Motors and Danske Invest 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.| Danske Invest vs. Novo Nordisk AS | Danske Invest vs. Nordea Bank Abp | Danske Invest vs. DSV Panalpina AS | Danske Invest vs. AP Mller |
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.
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