Correlation Between GM and Wuxi Xinhongye
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By analyzing existing cross correlation between General Motors and Wuxi Xinhongye Wire, you can compare the effects of market volatilities on GM and Wuxi Xinhongye 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 Wuxi Xinhongye. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Wuxi Xinhongye.
Diversification Opportunities for GM and Wuxi Xinhongye
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Wuxi is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Wuxi Xinhongye Wire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuxi Xinhongye Wire 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 Wuxi Xinhongye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuxi Xinhongye Wire has no effect on the direction of GM i.e., GM and Wuxi Xinhongye go up and down completely randomly.
Pair Corralation between GM and Wuxi Xinhongye
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Wuxi Xinhongye. But the stock apears to be less risky and, when comparing its historical volatility, General Motors is 1.4 times less risky than Wuxi Xinhongye. The stock trades about -0.22 of its potential returns per unit of risk. The Wuxi Xinhongye Wire is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,841 in Wuxi Xinhongye Wire on November 28, 2024 and sell it today you would earn a total of 430.00 from holding Wuxi Xinhongye Wire or generate 15.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 72.73% |
| Values | Daily Returns |
General Motors vs. Wuxi Xinhongye Wire
Performance |
| Timeline |
| General Motors |
| Wuxi Xinhongye Wire |
GM and Wuxi Xinhongye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Wuxi Xinhongye
The main advantage of trading using opposite GM and Wuxi Xinhongye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Wuxi Xinhongye 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 Wuxi Xinhongye will offset losses from the drop in Wuxi Xinhongye's long position.The idea behind General Motors and Wuxi Xinhongye Wire 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.| Wuxi Xinhongye vs. Shaanxi Meineng Clean | Wuxi Xinhongye vs. China Eastern Airlines | Wuxi Xinhongye vs. Anji Foodstuff Co | Wuxi Xinhongye vs. Cansino Biologics |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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