Correlation Between GM and Ssangyong Materials
Can any of the company-specific risk be diversified away by investing in both GM and Ssangyong Materials 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 Materials 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 Materials Corp, you can compare the effects of market volatilities on GM and Ssangyong Materials 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 Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Ssangyong Materials.
Diversification Opportunities for GM and Ssangyong Materials
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and Ssangyong is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Ssangyong Materials Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Materials Corp 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 Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssangyong Materials Corp has no effect on the direction of GM i.e., GM and Ssangyong Materials go up and down completely randomly.
Pair Corralation between GM and Ssangyong Materials
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.82 times more return on investment than Ssangyong Materials. However, General Motors is 1.22 times less risky than Ssangyong Materials. It trades about 0.07 of its potential returns per unit of risk. Ssangyong Materials Corp is currently generating about 0.01 per unit of risk. If you would invest 5,273 in General Motors on August 29, 2024 and sell it today you would earn a total of 206.00 from holding General Motors or generate 3.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Ssangyong Materials Corp
Performance |
| Timeline |
| General Motors |
| Ssangyong Materials Corp |
GM and Ssangyong Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Ssangyong Materials
The main advantage of trading using opposite GM and Ssangyong Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Ssangyong Materials 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 Materials will offset losses from the drop in Ssangyong Materials' long position.The idea behind General Motors and Ssangyong Materials Corp 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 Materials vs. AptaBio Therapeutics | Ssangyong Materials vs. Daewoo SBI SPAC | Ssangyong Materials vs. Dream Security co | Ssangyong Materials vs. Microfriend |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |