Correlation Between GM and Centre Testing
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By analyzing existing cross correlation between General Motors and Centre Testing Intl, you can compare the effects of market volatilities on GM and Centre Testing 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 Centre Testing. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Centre Testing.
Diversification Opportunities for GM and Centre Testing
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GM and Centre is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Centre Testing Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centre Testing Intl 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 Centre Testing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centre Testing Intl has no effect on the direction of GM i.e., GM and Centre Testing go up and down completely randomly.
Pair Corralation between GM and Centre Testing
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.83 times more return on investment than Centre Testing. However, General Motors is 1.21 times less risky than Centre Testing. It trades about 0.04 of its potential returns per unit of risk. Centre Testing Intl is currently generating about -0.02 per unit of risk. If you would invest 3,285 in General Motors on January 10, 2025 and sell it today you would earn a total of 1,289 from holding General Motors or generate 39.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.15% |
| Values | Daily Returns |
General Motors vs. Centre Testing Intl
Performance |
| Timeline |
| General Motors |
| Centre Testing Intl |
GM and Centre Testing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Centre Testing
The main advantage of trading using opposite GM and Centre Testing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Centre Testing 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 Centre Testing will offset losses from the drop in Centre Testing's long position.The idea behind General Motors and Centre Testing Intl 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.| Centre Testing vs. Industrial and Commercial | Centre Testing vs. Kweichow Moutai Co | Centre Testing vs. Agricultural Bank of | Centre Testing vs. China Mobile Limited |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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