Correlation Between GM and Tadir Gan
Can any of the company-specific risk be diversified away by investing in both GM and Tadir Gan 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 Tadir Gan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Tadir Gan 1993, you can compare the effects of market volatilities on GM and Tadir Gan 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 Tadir Gan. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Tadir Gan.
Diversification Opportunities for GM and Tadir Gan
Modest diversification
The 3 months correlation between GM and Tadir is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Tadir-Gan 1993 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tadir-Gan 1993 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 Tadir Gan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tadir-Gan 1993 has no effect on the direction of GM i.e., GM and Tadir Gan go up and down completely randomly.
Pair Corralation between GM and Tadir Gan
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.77 times more return on investment than Tadir Gan. However, General Motors is 1.3 times less risky than Tadir Gan. It trades about 0.03 of its potential returns per unit of risk. Tadir Gan 1993 is currently generating about 0.0 per unit of risk. If you would invest 3,757 in General Motors on December 30, 2023 and sell it today you would earn a total of 778.00 from holding General Motors or generate 20.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 79.37% |
Values | Daily Returns |
General Motors vs. Tadir-Gan 1993
Performance |
Timeline |
General Motors |
Tadir-Gan 1993 |
GM and Tadir Gan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GM and Tadir Gan
The main advantage of trading using opposite GM and Tadir Gan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Tadir Gan 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 Tadir Gan will offset losses from the drop in Tadir Gan's long position.The idea behind General Motors and Tadir Gan 1993 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.Tadir Gan vs. Bank Leumi Le Israel | Tadir Gan vs. Mizrahi Tefahot | Tadir Gan vs. Israel Discount Bank | Tadir Gan vs. Delek Group |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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