Correlation Between GM and Guangzhou Jinyi
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By analyzing existing cross correlation between General Motors and Guangzhou Jinyi Media, you can compare the effects of market volatilities on GM and Guangzhou Jinyi 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 Jinyi. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Guangzhou Jinyi.
Diversification Opportunities for GM and Guangzhou Jinyi
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Guangzhou is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Guangzhou Jinyi Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Jinyi Media 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 Jinyi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Jinyi Media has no effect on the direction of GM i.e., GM and Guangzhou Jinyi go up and down completely randomly.
Pair Corralation between GM and Guangzhou Jinyi
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.61 times more return on investment than Guangzhou Jinyi. However, General Motors is 1.64 times less risky than Guangzhou Jinyi. It trades about 0.07 of its potential returns per unit of risk. Guangzhou Jinyi Media is currently generating about 0.0 per unit of risk. If you would invest 3,524 in General Motors on August 28, 2024 and sell it today you would earn a total of 2,496 from holding General Motors or generate 70.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.8% |
| Values | Daily Returns |
General Motors vs. Guangzhou Jinyi Media
Performance |
| Timeline |
| General Motors |
| Guangzhou Jinyi Media |
GM and Guangzhou Jinyi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Guangzhou Jinyi
The main advantage of trading using opposite GM and Guangzhou Jinyi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Guangzhou Jinyi 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 Jinyi will offset losses from the drop in Guangzhou Jinyi's long position.The idea behind General Motors and Guangzhou Jinyi Media 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 Jinyi vs. Agricultural Bank of | Guangzhou Jinyi vs. Industrial and Commercial | Guangzhou Jinyi vs. Bank of China | Guangzhou Jinyi vs. PetroChina Co Ltd |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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