Correlation Between GM and Intech Managed
Can any of the company-specific risk be diversified away by investing in both GM and Intech Managed 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 Intech Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Intech Managed Volatility, you can compare the effects of market volatilities on GM and Intech Managed 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 Intech Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Intech Managed.
Diversification Opportunities for GM and Intech Managed
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GM and Intech is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Intech Managed Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intech Managed Volatility 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 Intech Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intech Managed Volatility has no effect on the direction of GM i.e., GM and Intech Managed go up and down completely randomly.
Pair Corralation between GM and Intech Managed
Allowing for the 90-day total investment horizon General Motors is expected to generate 3.47 times more return on investment than Intech Managed. However, GM is 3.47 times more volatile than Intech Managed Volatility. It trades about 0.11 of its potential returns per unit of risk. Intech Managed Volatility is currently generating about 0.28 per unit of risk. If you would invest 4,510 in General Motors on April 30, 2025 and sell it today you would earn a total of 701.00 from holding General Motors or generate 15.54% 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. Intech Managed Volatility
Performance |
| Timeline |
| General Motors |
| Intech Managed Volatility |
GM and Intech Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Intech Managed
The main advantage of trading using opposite GM and Intech Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Intech Managed 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 Intech Managed will offset losses from the drop in Intech Managed's long position.The idea behind General Motors and Intech Managed Volatility 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.| Intech Managed vs. Classic Value Fund | Intech Managed vs. Legg Mason Bw | Intech Managed vs. Strategic Income Opportunities | Intech Managed vs. Us Global Leaders |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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