Correlation Between Arcimoto and GM

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

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

Diversification Opportunities for Arcimoto and GM

-0.89

Correlation Coefficient

Arcimoto  GM

Pay attention - limited upside

The 3 months correlation between Arcimoto and GM is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Arcimoto and General Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Motors and Arcimoto 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 Arcimoto are associated (or correlated) with GM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Motors has no effect on the direction of Arcimoto i.e., Arcimoto and GM go up and down completely randomly.

Pair Corralation between Arcimoto and GM

Considering the 90-day investment horizon Arcimoto is expected to under-perform the GM. In addition to that, Arcimoto is 3.2 times more volatile than General Motors. It trades about -0.02 of its total potential returns per unit of risk. General Motors is currently generating about 0.16 per unit of volatility. If you would invest  2,905  in General Motors on January 19, 2024 and sell it today you would earn a total of  1,339  from holding General Motors or generate 46.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Arcimoto  vs.  General Motors

Arcimoto

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arcimoto has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in May 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

General Motors

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 14 (%) 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.

Pair Trading with Arcimoto and GM

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

The idea behind Arcimoto and General Motors 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.