Correlation Between GM and Victory Rs
Can any of the company-specific risk be diversified away by investing in both GM and Victory Rs 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 Victory Rs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Victory Rs International, you can compare the effects of market volatilities on GM and Victory Rs 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 Victory Rs. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Victory Rs.
Diversification Opportunities for GM and Victory Rs
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Victory is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Victory Rs International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Rs International 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 Victory Rs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Rs International has no effect on the direction of GM i.e., GM and Victory Rs go up and down completely randomly.
Pair Corralation between GM and Victory Rs
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.32 times more return on investment than Victory Rs. However, GM is 2.32 times more volatile than Victory Rs International. It trades about 0.11 of its potential returns per unit of risk. Victory Rs International is currently generating about -0.14 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 155.00 from holding General Motors or generate 3.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
General Motors vs. Victory Rs International
Performance |
Timeline |
General Motors |
Victory Rs International |
GM and Victory Rs Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GM and Victory Rs
The main advantage of trading using opposite GM and Victory Rs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Victory Rs 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 Victory Rs will offset losses from the drop in Victory Rs' long position.The idea behind General Motors and Victory Rs International 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.Victory Rs vs. Victory High Yield | Victory Rs vs. Victory Sycamore Established | Victory Rs vs. Victory Integrity Discovery | Victory Rs vs. Victory Munder Multi Cap |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |