Correlation Between GM and Shenzhen Bioeasy
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By analyzing existing cross correlation between General Motors and Shenzhen Bioeasy Biotechnology, you can compare the effects of market volatilities on GM and Shenzhen Bioeasy 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 Shenzhen Bioeasy. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Shenzhen Bioeasy.
Diversification Opportunities for GM and Shenzhen Bioeasy
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Shenzhen is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Shenzhen Bioeasy Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Bioeasy 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 Shenzhen Bioeasy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Bioeasy Bio has no effect on the direction of GM i.e., GM and Shenzhen Bioeasy go up and down completely randomly.
Pair Corralation between GM and Shenzhen Bioeasy
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.64 times more return on investment than Shenzhen Bioeasy. However, General Motors is 1.55 times less risky than Shenzhen Bioeasy. It trades about 0.25 of its potential returns per unit of risk. Shenzhen Bioeasy Biotechnology is currently generating about 0.01 per unit of risk. If you would invest 5,272 in General Motors on August 25, 2024 and sell it today you would earn a total of 581.00 from holding General Motors or generate 11.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Shenzhen Bioeasy Biotechnology
Performance |
| Timeline |
| General Motors |
| Shenzhen Bioeasy Bio |
GM and Shenzhen Bioeasy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Shenzhen Bioeasy
The main advantage of trading using opposite GM and Shenzhen Bioeasy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Shenzhen Bioeasy 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 Shenzhen Bioeasy will offset losses from the drop in Shenzhen Bioeasy's long position.The idea behind General Motors and Shenzhen Bioeasy Biotechnology 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.| Shenzhen Bioeasy vs. China State Construction | Shenzhen Bioeasy vs. Poly Real Estate | Shenzhen Bioeasy vs. China Vanke Co | Shenzhen Bioeasy vs. China Merchants Shekou |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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