Correlation Between GM and Jinhe Biotechnology
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By analyzing existing cross correlation between General Motors and Jinhe Biotechnology Co, you can compare the effects of market volatilities on GM and Jinhe Biotechnology 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 Jinhe Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Jinhe Biotechnology.
Diversification Opportunities for GM and Jinhe Biotechnology
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between GM and Jinhe is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Jinhe Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinhe Biotechnology 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 Jinhe Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinhe Biotechnology has no effect on the direction of GM i.e., GM and Jinhe Biotechnology go up and down completely randomly.
Pair Corralation between GM and Jinhe Biotechnology
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.97 times more return on investment than Jinhe Biotechnology. However, General Motors is 1.04 times less risky than Jinhe Biotechnology. It trades about 0.09 of its potential returns per unit of risk. Jinhe Biotechnology Co is currently generating about 0.08 per unit of risk. If you would invest 4,394 in General Motors on October 26, 2024 and sell it today you would earn a total of 1,028 from holding General Motors or generate 23.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.37% |
| Values | Daily Returns |
General Motors vs. Jinhe Biotechnology Co
Performance |
| Timeline |
| General Motors |
| Jinhe Biotechnology |
GM and Jinhe Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Jinhe Biotechnology
The main advantage of trading using opposite GM and Jinhe Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Jinhe Biotechnology 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 Jinhe Biotechnology will offset losses from the drop in Jinhe Biotechnology's long position.The idea behind General Motors and Jinhe Biotechnology Co 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.| Jinhe Biotechnology vs. Beingmate Baby Child | Jinhe Biotechnology vs. FSPG Hi Tech Co | Jinhe Biotechnology vs. Zhejiang JIULI Hi tech | Jinhe Biotechnology vs. Heilongjiang Transport Development |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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