Correlation Between GM and Spark Networks

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both GM and Spark Networks 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 Spark Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Spark Networks SE, you can compare the effects of market volatilities on GM and Spark Networks 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 Spark Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Spark Networks.

Diversification Opportunities for GM and Spark Networks

-0.86
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between GM and Spark is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Spark Networks SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spark Networks SE 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 Spark Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spark Networks SE has no effect on the direction of GM i.e., GM and Spark Networks go up and down completely randomly.

Pair Corralation between GM and Spark Networks

If you would invest  4,051  in General Motors on December 30, 2023 and sell it today you would earn a total of  484.00  from holding General Motors or generate 11.95% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy4.55%
ValuesDaily Returns

General Motors  vs.  Spark Networks SE

 Performance 
       Timeline  
General Motors 

Risk-Adjusted Performance

18 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal primary indicators, GM displayed solid returns over the last few months and may actually be approaching a breakup point.
Spark Networks SE 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Spark Networks SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Spark Networks is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

GM and Spark Networks Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GM and Spark Networks

The main advantage of trading using opposite GM and Spark Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Spark Networks 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 Spark Networks will offset losses from the drop in Spark Networks' long position.
The idea behind General Motors and Spark Networks SE 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.
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

Other Complementary Tools

Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Fundamental Analysis
View fundamental data based on most recent published financial statements
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios