Correlation Between GM and Changzhou Xingyu
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By analyzing existing cross correlation between General Motors and Changzhou Xingyu Automotive, you can compare the effects of market volatilities on GM and Changzhou Xingyu 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 Changzhou Xingyu. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Changzhou Xingyu.
Diversification Opportunities for GM and Changzhou Xingyu
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GM and Changzhou is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Changzhou Xingyu Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changzhou Xingyu Aut 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 Changzhou Xingyu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changzhou Xingyu Aut has no effect on the direction of GM i.e., GM and Changzhou Xingyu go up and down completely randomly.
Pair Corralation between GM and Changzhou Xingyu
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Changzhou Xingyu. In addition to that, GM is 1.15 times more volatile than Changzhou Xingyu Automotive. It trades about -0.14 of its total potential returns per unit of risk. Changzhou Xingyu Automotive is currently generating about -0.09 per unit of volatility. If you would invest 14,374 in Changzhou Xingyu Automotive on September 13, 2024 and sell it today you would lose (733.00) from holding Changzhou Xingyu Automotive or give up 5.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
General Motors vs. Changzhou Xingyu Automotive
Performance |
| Timeline |
| General Motors |
| Changzhou Xingyu Aut |
GM and Changzhou Xingyu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Changzhou Xingyu
The main advantage of trading using opposite GM and Changzhou Xingyu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Changzhou Xingyu 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 Changzhou Xingyu will offset losses from the drop in Changzhou Xingyu's long position.The idea behind General Motors and Changzhou Xingyu Automotive 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.| Changzhou Xingyu vs. StarPower Semiconductor | Changzhou Xingyu vs. Ye Chiu Metal | Changzhou Xingyu vs. Union Semiconductor Co | Changzhou Xingyu vs. Juneyao Airlines |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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