Correlation Between GM and Pacific Funds

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

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

Diversification Opportunities for GM and Pacific Funds

0.0
  Correlation Coefficient
General Motors
Pacific Funds Floating

Pay attention - limited upside

The 3 months correlation between GM and Pacific is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Pacific Funds Floating in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Pacific Funds Floating 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 Pacific Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Funds Floating has no effect on the direction of GM i.e., GM and Pacific Funds go up and down completely randomly.

Pair Corralation between GM and Pacific Funds

If you would invest  5,398  in General Motors on September 2, 2021 and sell it today you would earn a total of  508.00  from holding General Motors or generate 9.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy2.38%
ValuesDaily Returns

General Motors  vs.  Pacific Funds Floating

 Performance (%) 
      Timeline 
General Motors 
GM Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting primary indicators, GM revealed solid returns over the last few months and may actually be approaching a breakup point.

GM Price Channel

Pacific Funds Floating 
Pacific Performance
0 of 100
Over the last 90 days Pacific Funds Floating has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Pacific Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

GM and Pacific Funds Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with GM and Pacific Funds

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

General Motors

Pair trading matchups for GM

The idea behind General Motors and Pacific Funds Floating 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.

Pacific Funds Floating

Pair trading matchups for Pacific Funds

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GM vs. Pacific Funds
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Du Pont vs. Pacific Funds
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Pacific Funds as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Pacific Funds' systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Pacific Funds' unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Pacific Funds Floating.
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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