Correlation Between GM and Qingdao Citymedia
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By analyzing existing cross correlation between General Motors and Qingdao Citymedia Co, you can compare the effects of market volatilities on GM and Qingdao Citymedia 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 Qingdao Citymedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Qingdao Citymedia.
Diversification Opportunities for GM and Qingdao Citymedia
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Qingdao is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Qingdao Citymedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao Citymedia 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 Qingdao Citymedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Citymedia has no effect on the direction of GM i.e., GM and Qingdao Citymedia go up and down completely randomly.
Pair Corralation between GM and Qingdao Citymedia
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.2 times more return on investment than Qingdao Citymedia. However, GM is 1.2 times more volatile than Qingdao Citymedia Co. It trades about 0.12 of its potential returns per unit of risk. Qingdao Citymedia Co is currently generating about 0.12 per unit of risk. If you would invest 5,197 in General Motors on August 31, 2024 and sell it today you would earn a total of 353.00 from holding General Motors or generate 6.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Qingdao Citymedia Co
Performance |
| Timeline |
| General Motors |
| Qingdao Citymedia |
GM and Qingdao Citymedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Qingdao Citymedia
The main advantage of trading using opposite GM and Qingdao Citymedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Qingdao Citymedia 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 Qingdao Citymedia will offset losses from the drop in Qingdao Citymedia's long position.The idea behind General Motors and Qingdao Citymedia Co 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.| Qingdao Citymedia vs. BYD Co Ltd | Qingdao Citymedia vs. Agricultural Bank of | Qingdao Citymedia vs. Industrial and Commercial | Qingdao Citymedia vs. China State Construction |
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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