Correlation Between GM and Shanghai Yct
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By analyzing existing cross correlation between General Motors and Shanghai Yct Electronics, you can compare the effects of market volatilities on GM and Shanghai Yct 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 Shanghai Yct. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Shanghai Yct.
Diversification Opportunities for GM and Shanghai Yct
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and Shanghai is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Shanghai Yct Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Yct Electronics 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 Shanghai Yct. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Yct Electronics has no effect on the direction of GM i.e., GM and Shanghai Yct go up and down completely randomly.
Pair Corralation between GM and Shanghai Yct
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.89 times more return on investment than Shanghai Yct. However, General Motors is 1.13 times less risky than Shanghai Yct. It trades about 0.16 of its potential returns per unit of risk. Shanghai Yct Electronics is currently generating about 0.03 per unit of risk. If you would invest 5,096 in General Motors on September 2, 2024 and sell it today you would earn a total of 463.00 from holding General Motors or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
General Motors vs. Shanghai Yct Electronics
Performance |
| Timeline |
| General Motors |
| Shanghai Yct Electronics |
GM and Shanghai Yct Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Shanghai Yct
The main advantage of trading using opposite GM and Shanghai Yct positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Shanghai Yct 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 Shanghai Yct will offset losses from the drop in Shanghai Yct's long position.The idea behind General Motors and Shanghai Yct Electronics 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.| Shanghai Yct vs. Westone Information Industry | Shanghai Yct vs. Air China Ltd | Shanghai Yct vs. Northking Information Technology | Shanghai Yct vs. Tongding Interconnection Information |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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