Correlation Between GM and Boai NKY
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By analyzing existing cross correlation between General Motors and Boai NKY Pharmaceuticals, you can compare the effects of market volatilities on GM and Boai NKY 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 Boai NKY. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Boai NKY.
Diversification Opportunities for GM and Boai NKY
Poor diversification
The 3 months correlation between GM and Boai is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Boai NKY Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boai NKY Pharmaceuticals 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 Boai NKY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boai NKY Pharmaceuticals has no effect on the direction of GM i.e., GM and Boai NKY go up and down completely randomly.
Pair Corralation between GM and Boai NKY
Allowing for the 90-day total investment horizon GM is expected to generate 4.24 times less return on investment than Boai NKY. But when comparing it to its historical volatility, General Motors is 1.18 times less risky than Boai NKY. It trades about 0.06 of its potential returns per unit of risk. Boai NKY Pharmaceuticals is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,264 in Boai NKY Pharmaceuticals on September 5, 2024 and sell it today you would earn a total of 215.00 from holding Boai NKY Pharmaceuticals or generate 17.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
General Motors vs. Boai NKY Pharmaceuticals
Performance |
| Timeline |
| General Motors |
| Boai NKY Pharmaceuticals |
GM and Boai NKY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Boai NKY
The main advantage of trading using opposite GM and Boai NKY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Boai NKY 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 Boai NKY will offset losses from the drop in Boai NKY's long position.The idea behind General Motors and Boai NKY Pharmaceuticals 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.| Boai NKY vs. Zijin Mining Group | Boai NKY vs. Wanhua Chemical Group | Boai NKY vs. Baoshan Iron Steel | Boai NKY vs. Rongsheng Petrochemical 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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