Correlation Between GM and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both GM and Ssangyong Information at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GM and Ssangyong Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Ssangyong Information Communication, you can compare the effects of market volatilities on GM and Ssangyong Information 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 Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Ssangyong Information.
Diversification Opportunities for GM and Ssangyong Information
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GM and Ssangyong is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information 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 Ssangyong Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssangyong Information has no effect on the direction of GM i.e., GM and Ssangyong Information go up and down completely randomly.
Pair Corralation between GM and Ssangyong Information
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.19 times more return on investment than Ssangyong Information. However, GM is 1.19 times more volatile than Ssangyong Information Communication. It trades about 0.05 of its potential returns per unit of risk. Ssangyong Information Communication is currently generating about -0.02 per unit of risk. If you would invest 3,749 in General Motors on August 29, 2024 and sell it today you would earn a total of 1,730 from holding General Motors or generate 46.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.37% |
| Values | Daily Returns |
General Motors vs. Ssangyong Information Communic
Performance |
| Timeline |
| General Motors |
| Ssangyong Information |
GM and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Ssangyong Information
The main advantage of trading using opposite GM and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Ssangyong Information 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 Ssangyong Information will offset losses from the drop in Ssangyong Information's long position.The idea behind General Motors and Ssangyong Information Communication 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.| Ssangyong Information vs. Busan Industrial Co | Ssangyong Information vs. Busan Ind | Ssangyong Information vs. Mirae Asset Daewoo | Ssangyong Information vs. UNISEM Co |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |