Correlation Between GM and Guangzhou Zhujiang
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By analyzing existing cross correlation between General Motors and Guangzhou Zhujiang Brewery, you can compare the effects of market volatilities on GM and Guangzhou Zhujiang 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 Guangzhou Zhujiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Guangzhou Zhujiang.
Diversification Opportunities for GM and Guangzhou Zhujiang
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and Guangzhou is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Guangzhou Zhujiang Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Zhujiang 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 Guangzhou Zhujiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Zhujiang has no effect on the direction of GM i.e., GM and Guangzhou Zhujiang go up and down completely randomly.
Pair Corralation between GM and Guangzhou Zhujiang
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Guangzhou Zhujiang. In addition to that, GM is 2.14 times more volatile than Guangzhou Zhujiang Brewery. It trades about -0.34 of its total potential returns per unit of risk. Guangzhou Zhujiang Brewery is currently generating about 0.08 per unit of volatility. If you would invest 913.00 in Guangzhou Zhujiang Brewery on November 27, 2024 and sell it today you would earn a total of 12.00 from holding Guangzhou Zhujiang Brewery or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 75.0% |
| Values | Daily Returns |
General Motors vs. Guangzhou Zhujiang Brewery
Performance |
| Timeline |
| General Motors |
| Guangzhou Zhujiang |
GM and Guangzhou Zhujiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Guangzhou Zhujiang
The main advantage of trading using opposite GM and Guangzhou Zhujiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Guangzhou Zhujiang 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 Guangzhou Zhujiang will offset losses from the drop in Guangzhou Zhujiang's long position.The idea behind General Motors and Guangzhou Zhujiang Brewery 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.| Guangzhou Zhujiang vs. Vanfund Urban Investment | Guangzhou Zhujiang vs. Suzhou Xingye Material | Guangzhou Zhujiang vs. Metro Investment Development | Guangzhou Zhujiang vs. Western Metal Materials |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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