Correlation Between GM and Eagle Mlp
Can any of the company-specific risk be diversified away by investing in both GM and Eagle Mlp 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 Eagle Mlp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Eagle Mlp Strategy, you can compare the effects of market volatilities on GM and Eagle Mlp 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 Eagle Mlp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Eagle Mlp.
Diversification Opportunities for GM and Eagle Mlp
Almost no diversification
The 3 months correlation between GM and Eagle is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Eagle Mlp Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Mlp Strategy 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 Eagle Mlp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Mlp Strategy has no effect on the direction of GM i.e., GM and Eagle Mlp go up and down completely randomly.
Pair Corralation between GM and Eagle Mlp
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.57 times more return on investment than Eagle Mlp. However, GM is 1.57 times more volatile than Eagle Mlp Strategy. It trades about 0.05 of its potential returns per unit of risk. Eagle Mlp Strategy is currently generating about -0.07 per unit of risk. If you would invest 4,423 in General Motors on February 5, 2024 and sell it today you would earn a total of 63.00 from holding General Motors or generate 1.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
General Motors vs. Eagle Mlp Strategy
Performance |
Timeline |
General Motors |
Eagle Mlp Strategy |
GM and Eagle Mlp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GM and Eagle Mlp
The main advantage of trading using opposite GM and Eagle Mlp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Eagle Mlp 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 Eagle Mlp will offset losses from the drop in Eagle Mlp's long position.The idea behind General Motors and Eagle Mlp Strategy 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.Eagle Mlp vs. Tortoise Mlp Pipeline | Eagle Mlp vs. Oppenheimer Steelpath Mlp | Eagle Mlp vs. Oppenheimer Steelpath Mlp | Eagle Mlp vs. Oppenheimer Steelpath Mlp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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