Correlation Between GM and Xinjiang Beixin
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By analyzing existing cross correlation between General Motors and Xinjiang Beixin RoadBridge, you can compare the effects of market volatilities on GM and Xinjiang Beixin 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 Xinjiang Beixin. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Xinjiang Beixin.
Diversification Opportunities for GM and Xinjiang Beixin
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GM and Xinjiang is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Xinjiang Beixin RoadBridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Beixin Road 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 Xinjiang Beixin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Beixin Road has no effect on the direction of GM i.e., GM and Xinjiang Beixin go up and down completely randomly.
Pair Corralation between GM and Xinjiang Beixin
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.67 times more return on investment than Xinjiang Beixin. However, General Motors is 1.48 times less risky than Xinjiang Beixin. It trades about 0.19 of its potential returns per unit of risk. Xinjiang Beixin RoadBridge is currently generating about 0.11 per unit of risk. If you would invest 4,484 in General Motors on August 29, 2024 and sell it today you would earn a total of 995.00 from holding General Motors or generate 22.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 88.37% |
| Values | Daily Returns |
General Motors vs. Xinjiang Beixin RoadBridge
Performance |
| Timeline |
| General Motors |
| Xinjiang Beixin Road |
GM and Xinjiang Beixin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Xinjiang Beixin
The main advantage of trading using opposite GM and Xinjiang Beixin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Xinjiang Beixin 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 Xinjiang Beixin will offset losses from the drop in Xinjiang Beixin's long position.The idea behind General Motors and Xinjiang Beixin RoadBridge 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.| Xinjiang Beixin vs. PetroChina Co Ltd | Xinjiang Beixin vs. China State Construction | Xinjiang Beixin vs. China Mobile Limited | Xinjiang Beixin vs. Industrial and Commercial |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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