Correlation Between GM and Shengtak New
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By analyzing existing cross correlation between General Motors and Shengtak New Material, you can compare the effects of market volatilities on GM and Shengtak New 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 Shengtak New. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Shengtak New.
Diversification Opportunities for GM and Shengtak New
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GM and Shengtak is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Shengtak New Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shengtak New Material 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 Shengtak New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shengtak New Material has no effect on the direction of GM i.e., GM and Shengtak New go up and down completely randomly.
Pair Corralation between GM and Shengtak New
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.56 times more return on investment than Shengtak New. However, General Motors is 1.78 times less risky than Shengtak New. It trades about 0.04 of its potential returns per unit of risk. Shengtak New Material is currently generating about 0.01 per unit of risk. If you would invest 4,054 in General Motors on September 29, 2024 and sell it today you would earn a total of 1,374 from holding General Motors or generate 33.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.06% |
| Values | Daily Returns |
General Motors vs. Shengtak New Material
Performance |
| Timeline |
| General Motors |
| Shengtak New Material |
GM and Shengtak New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Shengtak New
The main advantage of trading using opposite GM and Shengtak New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Shengtak New 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 Shengtak New will offset losses from the drop in Shengtak New's long position.The idea behind General Motors and Shengtak New Material 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.| Shengtak New vs. Hubei Geoway Investment | Shengtak New vs. Jiujiang Shanshui Technology | Shengtak New vs. Changchun UP Optotech | Shengtak New vs. Tieling Newcity Investment |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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