Correlation Between GM and Personalis

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

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

Diversification Opportunities for GM and Personalis

0.66

Correlation Coefficient

GM  Personalis

Poor diversification

The 3 months correlation between GM and Personalis is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Personalis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Personalis 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 Personalis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Personalis has no effect on the direction of GM i.e., GM and Personalis go up and down completely randomly.

Pair Corralation between GM and Personalis

Allowing for the 90-day total investment horizon GM is expected to generate 1.25 times less return on investment than Personalis. But when comparing it to its historical volatility, General Motors is 1.82 times less risky than Personalis. It trades about 0.12 of its potential returns per unit of risk. Personalis is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  484.00  in Personalis on May 7, 2025 and sell it today you would earn a total of  80.00  from holding Personalis or generate 16.53% return on investment over 90 days.

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

General Motors  vs.  Personalis

General Motors

Risk-Adjusted Performance

Fair

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.

Personalis

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Personalis are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Personalis disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GM and Personalis

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

The idea behind General Motors and Personalis 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 Global Correlations module to find global opportunities by holding instruments from different markets.