Correlation Between GM and China Galaxy
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By analyzing existing cross correlation between General Motors and China Galaxy Securities, you can compare the effects of market volatilities on GM and China Galaxy 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 China Galaxy. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and China Galaxy.
Diversification Opportunities for GM and China Galaxy
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and China is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and China Galaxy Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Galaxy Securities 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 China Galaxy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Galaxy Securities has no effect on the direction of GM i.e., GM and China Galaxy go up and down completely randomly.
Pair Corralation between GM and China Galaxy
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.88 times more return on investment than China Galaxy. However, General Motors is 1.14 times less risky than China Galaxy. It trades about -0.02 of its potential returns per unit of risk. China Galaxy Securities is currently generating about -0.18 per unit of risk. If you would invest 5,224 in General Motors on October 17, 2024 and sell it today you would lose (54.00) from holding General Motors or give up 1.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
General Motors vs. China Galaxy Securities
Performance |
| Timeline |
| General Motors |
| China Galaxy Securities |
GM and China Galaxy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and China Galaxy
The main advantage of trading using opposite GM and China Galaxy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, China Galaxy 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 China Galaxy will offset losses from the drop in China Galaxy's long position.The idea behind General Motors and China Galaxy Securities 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.| China Galaxy vs. Jinlong Machinery Electronic | China Galaxy vs. Iat Automobile Technology | China Galaxy vs. Huasi Agricultural Development | China Galaxy vs. Masterwork Machinery |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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