Correlation Between GM and Sunny Loan
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By analyzing existing cross correlation between General Motors and Sunny Loan Top, you can compare the effects of market volatilities on GM and Sunny Loan 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 Sunny Loan. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Sunny Loan.
Diversification Opportunities for GM and Sunny Loan
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and Sunny is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Sunny Loan Top in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Loan Top 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 Sunny Loan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Loan Top has no effect on the direction of GM i.e., GM and Sunny Loan go up and down completely randomly.
Pair Corralation between GM and Sunny Loan
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.56 times more return on investment than Sunny Loan. However, General Motors is 1.8 times less risky than Sunny Loan. It trades about 0.32 of its potential returns per unit of risk. Sunny Loan Top is currently generating about -0.17 per unit of risk. If you would invest 5,273 in General Motors on August 28, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Sunny Loan Top
Performance |
| Timeline |
| General Motors |
| Sunny Loan Top |
GM and Sunny Loan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Sunny Loan
The main advantage of trading using opposite GM and Sunny Loan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Sunny Loan 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 Sunny Loan will offset losses from the drop in Sunny Loan's long position.The idea behind General Motors and Sunny Loan Top 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.| Sunny Loan vs. Kweichow Moutai Co | Sunny Loan vs. Contemporary Amperex Technology | Sunny Loan vs. G bits Network Technology | Sunny Loan vs. BYD Co Ltd |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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