Correlation Between GM and Joincare Pharmaceutical
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By analyzing existing cross correlation between General Motors and Joincare Pharmaceutical Group, you can compare the effects of market volatilities on GM and Joincare Pharmaceutical 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 Joincare Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Joincare Pharmaceutical.
Diversification Opportunities for GM and Joincare Pharmaceutical
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Joincare is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Joincare Pharmaceutical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joincare Pharmaceutical 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 Joincare Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joincare Pharmaceutical has no effect on the direction of GM i.e., GM and Joincare Pharmaceutical go up and down completely randomly.
Pair Corralation between GM and Joincare Pharmaceutical
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.12 times more return on investment than Joincare Pharmaceutical. However, GM is 1.12 times more volatile than Joincare Pharmaceutical Group. It trades about 0.32 of its potential returns per unit of risk. Joincare Pharmaceutical Group is currently generating about -0.11 per unit of risk. If you would invest 5,273 in General Motors on August 27, 2024 and sell it today you would earn a total of 747.00 from holding General Motors or generate 14.17% 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. Joincare Pharmaceutical Group
Performance |
| Timeline |
| General Motors |
| Joincare Pharmaceutical |
GM and Joincare Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Joincare Pharmaceutical
The main advantage of trading using opposite GM and Joincare Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Joincare Pharmaceutical 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 Joincare Pharmaceutical will offset losses from the drop in Joincare Pharmaceutical's long position.The idea behind General Motors and Joincare Pharmaceutical 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.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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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