Correlation Between GM and Guangdong Wens
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By analyzing existing cross correlation between General Motors and Guangdong Wens Foodstuff, you can compare the effects of market volatilities on GM and Guangdong Wens 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 Guangdong Wens. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Guangdong Wens.
Diversification Opportunities for GM and Guangdong Wens
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GM and Guangdong is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Guangdong Wens Foodstuff in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Wens Foodstuff 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 Guangdong Wens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Wens Foodstuff has no effect on the direction of GM i.e., GM and Guangdong Wens go up and down completely randomly.
Pair Corralation between GM and Guangdong Wens
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.07 times more return on investment than Guangdong Wens. However, GM is 1.07 times more volatile than Guangdong Wens Foodstuff. It trades about 0.05 of its potential returns per unit of risk. Guangdong Wens Foodstuff is currently generating about 0.0 per unit of risk. If you would invest 3,805 in General Motors on September 3, 2024 and sell it today you would earn a total of 1,754 from holding General Motors or generate 46.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.36% |
| Values | Daily Returns |
General Motors vs. Guangdong Wens Foodstuff
Performance |
| Timeline |
| General Motors |
| Guangdong Wens Foodstuff |
GM and Guangdong Wens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Guangdong Wens
The main advantage of trading using opposite GM and Guangdong Wens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Guangdong Wens 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 Guangdong Wens will offset losses from the drop in Guangdong Wens' long position.The idea behind General Motors and Guangdong Wens Foodstuff 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.| Guangdong Wens vs. Beijing Wantai Biological | Guangdong Wens vs. Aluminum Corp of | Guangdong Wens vs. COL Digital Publishing | Guangdong Wens vs. Shaanxi Meineng Clean |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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