Correlation Between GM and Samhyun Steel
Can any of the company-specific risk be diversified away by investing in both GM and Samhyun Steel 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 Samhyun Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Samhyun Steel Co, you can compare the effects of market volatilities on GM and Samhyun Steel 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 Samhyun Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Samhyun Steel.
Diversification Opportunities for GM and Samhyun Steel
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GM and Samhyun is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Samhyun Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhyun Steel 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 Samhyun Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhyun Steel has no effect on the direction of GM i.e., GM and Samhyun Steel go up and down completely randomly.
Pair Corralation between GM and Samhyun Steel
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Samhyun Steel. In addition to that, GM is 4.86 times more volatile than Samhyun Steel Co. It trades about -0.13 of its total potential returns per unit of risk. Samhyun Steel Co is currently generating about -0.58 per unit of volatility. If you would invest 454,000 in Samhyun Steel Co on November 5, 2024 and sell it today you would lose (25,500) from holding Samhyun Steel Co or give up 5.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.0% |
| Values | Daily Returns |
General Motors vs. Samhyun Steel Co
Performance |
| Timeline |
| General Motors |
| Samhyun Steel |
GM and Samhyun Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Samhyun Steel
The main advantage of trading using opposite GM and Samhyun Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Samhyun Steel 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 Samhyun Steel will offset losses from the drop in Samhyun Steel's long position.The idea behind General Motors and Samhyun Steel 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.| Samhyun Steel vs. Alton Sports CoLtd | Samhyun Steel vs. NICE Information Service | Samhyun Steel vs. Hotel Shilla Co | Samhyun Steel vs. Kaonmedia 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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