Correlation Between GM and China Minsheng
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By analyzing existing cross correlation between General Motors and China Minsheng Banking, you can compare the effects of market volatilities on GM and China Minsheng 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 Minsheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and China Minsheng.
Diversification Opportunities for GM and China Minsheng
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GM and China is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and China Minsheng Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Minsheng Banking 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 Minsheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Minsheng Banking has no effect on the direction of GM i.e., GM and China Minsheng go up and down completely randomly.
Pair Corralation between GM and China Minsheng
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.47 times more return on investment than China Minsheng. However, GM is 1.47 times more volatile than China Minsheng Banking. It trades about 0.05 of its potential returns per unit of risk. China Minsheng Banking is currently generating about 0.02 per unit of risk. If you would invest 3,816 in General Motors on November 5, 2024 and sell it today you would earn a total of 974.00 from holding General Motors or generate 25.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.72% |
| Values | Daily Returns |
General Motors vs. China Minsheng Banking
Performance |
| Timeline |
| General Motors |
| China Minsheng Banking |
GM and China Minsheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and China Minsheng
The main advantage of trading using opposite GM and China Minsheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, China Minsheng 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 Minsheng will offset losses from the drop in China Minsheng's long position.The idea behind General Motors and China Minsheng Banking 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 Minsheng vs. Xiangpiaopiao Food Co | China Minsheng vs. Namchow Food Group | China Minsheng vs. Yankershop Food Co | China Minsheng vs. Jiujiang Shanshui Technology |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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