Correlation Between Fiat Chrysler and GM
Can any of the company-specific risk be diversified away by investing in both Fiat Chrysler 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 Fiat Chrysler and GM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fiat Chrysler Automobiles and General Motors, you can compare the effects of market volatilities on Fiat Chrysler 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 Fiat Chrysler with a short position of GM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiat Chrysler and GM.
Diversification Opportunities for Fiat Chrysler and GM
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fiat and GM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fiat Chrysler Automobiles and General Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Motors and Fiat Chrysler 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 Fiat Chrysler Automobiles 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 Fiat Chrysler i.e., Fiat Chrysler and GM go up and down completely randomly.
Pair Corralation between Fiat Chrysler and GM
If you would invest 4,355 in General Motors on January 25, 2024 and sell it today you would earn a total of 153.00 from holding General Motors or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Fiat Chrysler Automobiles vs. General Motors
Performance |
| Timeline |
| Fiat Chrysler Automobiles |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| General Motors |
Fiat Chrysler and GM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiat Chrysler and GM
The main advantage of trading using opposite Fiat Chrysler and GM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiat Chrysler 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.| Fiat Chrysler vs. Vector Group | Fiat Chrysler vs. Keurig Dr Pepper | Fiat Chrysler vs. nLIGHT Inc | Fiat Chrysler vs. Westrock Coffee |
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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.
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