Correlation Between GM and Jiangsu Broadcasting
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By analyzing existing cross correlation between General Motors and Jiangsu Broadcasting Cable, you can compare the effects of market volatilities on GM and Jiangsu Broadcasting 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 Jiangsu Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Jiangsu Broadcasting.
Diversification Opportunities for GM and Jiangsu Broadcasting
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Jiangsu is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Jiangsu Broadcasting Cable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Broadcasting 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 Jiangsu Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Broadcasting has no effect on the direction of GM i.e., GM and Jiangsu Broadcasting go up and down completely randomly.
Pair Corralation between GM and Jiangsu Broadcasting
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.15 times more return on investment than Jiangsu Broadcasting. However, GM is 1.15 times more volatile than Jiangsu Broadcasting Cable. It trades about 0.08 of its potential returns per unit of risk. Jiangsu Broadcasting Cable is currently generating about -0.01 per unit of risk. If you would invest 3,274 in General Motors on August 31, 2024 and sell it today you would earn a total of 2,276 from holding General Motors or generate 69.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.45% |
| Values | Daily Returns |
General Motors vs. Jiangsu Broadcasting Cable
Performance |
| Timeline |
| General Motors |
| Jiangsu Broadcasting |
GM and Jiangsu Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Jiangsu Broadcasting
The main advantage of trading using opposite GM and Jiangsu Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Jiangsu Broadcasting 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 Jiangsu Broadcasting will offset losses from the drop in Jiangsu Broadcasting's long position.The idea behind General Motors and Jiangsu Broadcasting Cable 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.| Jiangsu Broadcasting vs. BYD Co Ltd | Jiangsu Broadcasting vs. Agricultural Bank of | Jiangsu Broadcasting vs. Industrial and Commercial | Jiangsu Broadcasting 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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