Pair Correlation Between GM and Facebook

This module allows you to analyze existing cross correlation between General Motors Company and Facebook Inc. You can compare the effects of market volatilities on GM and Facebook 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 Facebook. See also your portfolio center. Please also check ongoing floating volatility patterns of GM and Facebook.
 Time Horizon     30 Days    Login   to change
Symbolsvs
 General Motors Company  vs   Facebook Inc
 Performance (%) 
      Timeline 

Pair Volatility

Allowing for the 30-days total investment horizon, General Motors Company is expected to under-perform the Facebook. But the stock apears to be less risky and, when comparing its historical volatility, General Motors Company is 1.12 times less risky than Facebook. The stock trades about -0.11 of its potential returns per unit of risk. The Facebook Inc is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  18,748  in Facebook Inc on January 25, 2018 and sell it today you would lose (419.00)  from holding Facebook Inc or give up 2.23% of portfolio value over 30 days.

Correlation Coefficient

Pair Corralation between GM and Facebook
0.56

Parameters

Time Period1 Month [change]
DirectionPositive 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Diversification

Very weak diversification

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

Comparative Volatility

 Predicted Return Density 
      Returns 

General Motors

  
0 

Risk-Adjusted Performance

Over the last 30 days General Motors Company has generated negative risk-adjusted returns adding no value to investors with long positions.

Facebook Inc

  
0 

Risk-Adjusted Performance

Over the last 30 days Facebook Inc has generated negative risk-adjusted returns adding no value to investors with long positions.