Correlation Between GM and Shenyang Blue
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By analyzing existing cross correlation between General Motors and Shenyang Blue Silver, you can compare the effects of market volatilities on GM and Shenyang Blue 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 Shenyang Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Shenyang Blue.
Diversification Opportunities for GM and Shenyang Blue
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Shenyang is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Shenyang Blue Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyang Blue Silver 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 Shenyang Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenyang Blue Silver has no effect on the direction of GM i.e., GM and Shenyang Blue go up and down completely randomly.
Pair Corralation between GM and Shenyang Blue
Allowing for the 90-day total investment horizon GM is expected to generate 3.55 times less return on investment than Shenyang Blue. But when comparing it to its historical volatility, General Motors is 2.25 times less risky than Shenyang Blue. It trades about 0.08 of its potential returns per unit of risk. Shenyang Blue Silver is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,476 in Shenyang Blue Silver on September 3, 2024 and sell it today you would earn a total of 1,369 from holding Shenyang Blue Silver or generate 92.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.8% |
| Values | Daily Returns |
General Motors vs. Shenyang Blue Silver
Performance |
| Timeline |
| General Motors |
| Shenyang Blue Silver |
GM and Shenyang Blue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Shenyang Blue
The main advantage of trading using opposite GM and Shenyang Blue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Shenyang Blue 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 Shenyang Blue will offset losses from the drop in Shenyang Blue's long position.The idea behind General Motors and Shenyang Blue Silver 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.| Shenyang Blue vs. Cultural Investment Holdings | Shenyang Blue vs. Gome Telecom Equipment | Shenyang Blue vs. Bus Online Co | Shenyang Blue vs. Holitech Technology 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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