Correlation Between GM and Shenzhen Silver
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By analyzing existing cross correlation between General Motors and Shenzhen Silver Basis, you can compare the effects of market volatilities on GM and Shenzhen Silver 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 Shenzhen Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Shenzhen Silver.
Diversification Opportunities for GM and Shenzhen Silver
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and Shenzhen is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Shenzhen Silver Basis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Silver Basis 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 Shenzhen Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Silver Basis has no effect on the direction of GM i.e., GM and Shenzhen Silver go up and down completely randomly.
Pair Corralation between GM and Shenzhen Silver
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.84 times more return on investment than Shenzhen Silver. However, General Motors is 1.2 times less risky than Shenzhen Silver. It trades about -0.15 of its potential returns per unit of risk. Shenzhen Silver Basis is currently generating about -0.17 per unit of risk. If you would invest 5,728 in General Motors on September 13, 2024 and sell it today you would lose (498.00) from holding General Motors or give up 8.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
General Motors vs. Shenzhen Silver Basis
Performance |
| Timeline |
| General Motors |
| Shenzhen Silver Basis |
GM and Shenzhen Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Shenzhen Silver
The main advantage of trading using opposite GM and Shenzhen Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Shenzhen Silver 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 Shenzhen Silver will offset losses from the drop in Shenzhen Silver's long position.The idea behind General Motors and Shenzhen Silver Basis 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.| Shenzhen Silver vs. Jointo Energy Investment | Shenzhen Silver vs. Harbin Air Conditioning | Shenzhen Silver vs. Harbin Hatou Investment | Shenzhen Silver vs. Jiangsu Yueda Investment |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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