Correlation Between GM and Huali Industrial
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By analyzing existing cross correlation between General Motors and Huali Industrial Group, you can compare the effects of market volatilities on GM and Huali Industrial 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 Huali Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Huali Industrial.
Diversification Opportunities for GM and Huali Industrial
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GM and Huali is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Huali Industrial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huali Industrial 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 Huali Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huali Industrial has no effect on the direction of GM i.e., GM and Huali Industrial go up and down completely randomly.
Pair Corralation between GM and Huali Industrial
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.93 times more return on investment than Huali Industrial. However, General Motors is 1.08 times less risky than Huali Industrial. It trades about 0.08 of its potential returns per unit of risk. Huali Industrial Group is currently generating about 0.05 per unit of risk. If you would invest 4,476 in General Motors on August 29, 2024 and sell it today you would earn a total of 1,003 from holding General Motors or generate 22.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.8% |
| Values | Daily Returns |
General Motors vs. Huali Industrial Group
Performance |
| Timeline |
| General Motors |
| Huali Industrial |
GM and Huali Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Huali Industrial
The main advantage of trading using opposite GM and Huali Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Huali Industrial 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 Huali Industrial will offset losses from the drop in Huali Industrial's long position.The idea behind General Motors and Huali Industrial Group 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.| Huali Industrial vs. Shenzhen Centralcon Investment | Huali Industrial vs. Sunwave Communications Co | Huali Industrial vs. Nanjing Putian Telecommunications | Huali Industrial vs. Vanfund Urban 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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