Correlation Between GM and Beijing Scitop
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By analyzing existing cross correlation between General Motors and Beijing Scitop Bio, you can compare the effects of market volatilities on GM and Beijing Scitop 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 Beijing Scitop. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Beijing Scitop.
Diversification Opportunities for GM and Beijing Scitop
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and Beijing is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Beijing Scitop Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Scitop Bio 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 Beijing Scitop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Scitop Bio has no effect on the direction of GM i.e., GM and Beijing Scitop go up and down completely randomly.
Pair Corralation between GM and Beijing Scitop
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.12 times more return on investment than Beijing Scitop. However, GM is 1.12 times more volatile than Beijing Scitop Bio. It trades about 0.14 of its potential returns per unit of risk. Beijing Scitop Bio is currently generating about 0.13 per unit of risk. If you would invest 5,180 in General Motors on September 3, 2024 and sell it today you would earn a total of 379.00 from holding General Motors or generate 7.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
General Motors vs. Beijing Scitop Bio
Performance |
| Timeline |
| General Motors |
| Beijing Scitop Bio |
GM and Beijing Scitop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Beijing Scitop
The main advantage of trading using opposite GM and Beijing Scitop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Beijing Scitop 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 Beijing Scitop will offset losses from the drop in Beijing Scitop's long position.The idea behind General Motors and Beijing Scitop Bio 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.| Beijing Scitop vs. Southchip Semiconductor Technology | Beijing Scitop vs. Anhui Huilong Agricultural | Beijing Scitop vs. Shaanxi Construction Machinery | Beijing Scitop vs. Will Semiconductor 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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