General Motors stock (NYSE: GM) has risen by 6% over the last five trading days. In comparison the broader S&P500 rose by 0.6% over the last five trading days. GM’s stock witnessed a rise on Thursday after an announcement that they expect first half profits to be significantly better than the prior guidance, and a rise in shipments of pickup trucks as they continue to prioritize semiconductor usage efficiently. Will the company continue its upward trajectory over the coming weeks, or is a fall in the stock imminent? According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price using multiple years of historical stock data, returns for GM’s stock average around 1.5% in the next one-month (twenty-one trading days) period after experiencing a 6% rise in a week (five trading days). Further, the stock is likely to underperform S&P500 returns by 0.5% over the next month (twenty-one trading days).
But how would these numbers change if you are interested in holding GM stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test General Motors stock chances of a rise after a fall. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day!
MACHINE LEARNING ENGINE – try it yourself:
IF GM stock moved by -5% over five trading days, THEN over the next twenty-one trading days, GM stock moves an average of 3.3%, which implies an excess return of 0.7% compared to the S&P500.
More importantly, there is a 59% probability of a positive return over the next twenty-one trading days and a 49% probability of a positive excess return after a -5% change over five trading days.
Some Fun Scenarios, FAQs & Making Sense of General Motors Stock Movements
Question 1: Is the average return for General Motors stock higher after a drop?
Case 1: General Motors stock drops by -5% or more in a week
Case 2: General Motors stock rises by 5% or more in a week
Is the average return for General Motors stock higher over the subsequent month after Case 1 or Case 2?
GM stock fares better after Case 1, with an average return of 3.4% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 1.5% for Case 2.
In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.
Try the Trefis machine learning engine above to see for yourself how General Motors Group stock is likely to behave after any specific gain or loss over a period.
Question 2: Does patience pay?
If you buy and hold General Motors stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.
Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!
For GM stock, the returns over the next N days after a -5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:
You can try the engine to see what this table looks like for GM stock after a larger loss over the last week, month, or quarter.
Question 3: What about the average return after a rise if you wait for a while?
The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although GM stock appears to be an exception to this general observation.
GM’s returns over the next N days after a 5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:
It’s pretty powerful to test the trend for yourself for GM stock by changing the inputs in the charts above.
While GM stock may have moved, it is helpful to see how its peers stack up. Check out Ford Peer Comparisons to see how Ford compares against peers on metrics that matter. You can find more such useful comparisons on Peer Comparisons.