Correlation Between GM and China Southern
Specify exactly 2 symbols:
By analyzing existing cross correlation between General Motors and China Southern SSE, you can compare the effects of market volatilities on GM and China Southern 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 China Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and China Southern.
Diversification Opportunities for GM and China Southern
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and China is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and China Southern SSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Southern SSE 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 China Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Southern SSE has no effect on the direction of GM i.e., GM and China Southern go up and down completely randomly.
Pair Corralation between GM and China Southern
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.21 times more return on investment than China Southern. However, GM is 1.21 times more volatile than China Southern SSE. It trades about 0.09 of its potential returns per unit of risk. China Southern SSE is currently generating about 0.04 per unit of risk. If you would invest 3,508 in General Motors on September 12, 2024 and sell it today you would earn a total of 1,696 from holding General Motors or generate 48.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.97% |
| Values | Daily Returns |
General Motors vs. China Southern SSE
Performance |
| Timeline |
| General Motors |
| China Southern SSE |
GM and China Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and China Southern
The main advantage of trading using opposite GM and China Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, China Southern 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 China Southern will offset losses from the drop in China Southern's long position.The idea behind General Motors and China Southern SSE 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.| China Southern vs. Shenzhen MTC Co | China Southern vs. Ming Yang Smart | China Southern vs. Changzhou Almaden Co | China Southern vs. 159681 |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |