Correlation Between GM and Immunoprecise Antibodies

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

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

Diversification Opportunities for GM and Immunoprecise Antibodies

-0.11

Correlation Coefficient

GM  Immunoprecise Antibodies

Good diversification

The 3 months correlation between GM and Immunoprecise is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Immunoprecise Antibodies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immunoprecise Antibodies 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 Immunoprecise Antibodies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immunoprecise Antibodies has no effect on the direction of GM i.e., GM and Immunoprecise Antibodies go up and down completely randomly.

Pair Corralation between GM and Immunoprecise Antibodies

Allowing for the 90-day total investment horizon General Motors is expected to generate 0.33 times more return on investment than Immunoprecise Antibodies. However, General Motors is 3.04 times less risky than Immunoprecise Antibodies. It trades about 0.08 of its potential returns per unit of risk. Immunoprecise Antibodies is currently generating about 0.0 per unit of risk. If you would invest  4,752  in General Motors on July 19, 2024 and sell it today you would earn a total of  149.00  from holding General Motors or generate 3.14% 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.  Immunoprecise Antibodies

General Motors

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, GM is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Immunoprecise Antibodies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Immunoprecise Antibodies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in November 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with GM and Immunoprecise Antibodies

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

The idea behind General Motors and Immunoprecise Antibodies 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.