Correlation Between GM and Ingen Technologies
Can any of the company-specific risk be diversified away by investing in both GM and Ingen Technologies 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 Ingen Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Ingen Technologies, you can compare the effects of market volatilities on GM and Ingen Technologies 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 Ingen Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Ingen Technologies.
Diversification Opportunities for GM and Ingen Technologies
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GM and Ingen is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Ingen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingen Technologies 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 Ingen Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingen Technologies has no effect on the direction of GM i.e., GM and Ingen Technologies go up and down completely randomly.
Pair Corralation between GM and Ingen Technologies
Allowing for the 90-day total investment horizon GM is expected to generate 38.42 times less return on investment than Ingen Technologies. But when comparing it to its historical volatility, General Motors is 73.47 times less risky than Ingen Technologies. It trades about 0.24 of its potential returns per unit of risk. Ingen Technologies is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Ingen Technologies on January 26, 2024 and sell it today you would earn a total of 0.00 from holding Ingen Technologies or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Ingen Technologies
Performance |
| Timeline |
| General Motors |
| Ingen Technologies |
GM and Ingen Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Ingen Technologies
The main advantage of trading using opposite GM and Ingen Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Ingen Technologies 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 Ingen Technologies will offset losses from the drop in Ingen Technologies' long position.The idea behind General Motors and Ingen Technologies 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.| Ingen Technologies vs. Rapid Therapeutic Science | Ingen Technologies vs. Bioelectronics Corp | Ingen Technologies vs. InspireMD | Ingen Technologies vs. Thermogenesis Holdings |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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