Correlation Between GM and Deutsche Science

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

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

Diversification Opportunities for GM and Deutsche Science

0.85

Correlation Coefficient

GM  Deutsche Science

Very poor diversification

The 3 months correlation between GM and Deutsche is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Deutsche Science And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Science And 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 Deutsche Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Science And has no effect on the direction of GM i.e., GM and Deutsche Science go up and down completely randomly.

Pair Corralation between GM and Deutsche Science

Allowing for the 90-day total investment horizon GM is expected to generate 1.02 times less return on investment than Deutsche Science. In addition to that, GM is 2.32 times more volatile than Deutsche Science And. It trades about 0.12 of its total potential returns per unit of risk. Deutsche Science And is currently generating about 0.28 per unit of volatility. If you would invest  3,608  in Deutsche Science And on May 6, 2025 and sell it today you would earn a total of  663.00  from holding Deutsche Science And or generate 18.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

General Motors  vs.  Deutsche Science And

General Motors

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile primary indicators, GM displayed solid returns over the last few months and may actually be approaching a breakup point.

Deutsche Science And

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Science And are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Deutsche Science showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GM and Deutsche Science

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

The idea behind General Motors and Deutsche Science And 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.