Correlation Between GM and BTG Hotels
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By analyzing existing cross correlation between General Motors and BTG Hotels Group, you can compare the effects of market volatilities on GM and BTG Hotels 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 BTG Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and BTG Hotels.
Diversification Opportunities for GM and BTG Hotels
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and BTG is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and BTG Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTG Hotels Group 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 BTG Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTG Hotels Group has no effect on the direction of GM i.e., GM and BTG Hotels go up and down completely randomly.
Pair Corralation between GM and BTG Hotels
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.58 times more return on investment than BTG Hotels. However, GM is 1.58 times more volatile than BTG Hotels Group. It trades about 0.07 of its potential returns per unit of risk. BTG Hotels Group is currently generating about 0.04 per unit of risk. If you would invest 5,273 in General Motors on August 29, 2024 and sell it today you would earn a total of 206.00 from holding General Motors or generate 3.91% 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. BTG Hotels Group
Performance |
| Timeline |
| General Motors |
| BTG Hotels Group |
GM and BTG Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and BTG Hotels
The main advantage of trading using opposite GM and BTG Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, BTG Hotels 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 BTG Hotels will offset losses from the drop in BTG Hotels' long position.The idea behind General Motors and BTG Hotels Group 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.| BTG Hotels vs. Biwin Storage Technology | BTG Hotels vs. PetroChina Co Ltd | BTG Hotels vs. Industrial and Commercial | BTG Hotels vs. China Construction Bank |
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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