Correlation Between GM and Jinduicheng Molybdenum
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By analyzing existing cross correlation between General Motors and Jinduicheng Molybdenum Co, you can compare the effects of market volatilities on GM and Jinduicheng Molybdenum 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 Jinduicheng Molybdenum. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Jinduicheng Molybdenum.
Diversification Opportunities for GM and Jinduicheng Molybdenum
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and Jinduicheng is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Jinduicheng Molybdenum Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinduicheng Molybdenum 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 Jinduicheng Molybdenum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinduicheng Molybdenum has no effect on the direction of GM i.e., GM and Jinduicheng Molybdenum go up and down completely randomly.
Pair Corralation between GM and Jinduicheng Molybdenum
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.75 times more return on investment than Jinduicheng Molybdenum. However, GM is 1.75 times more volatile than Jinduicheng Molybdenum Co. It trades about 0.12 of its potential returns per unit of risk. Jinduicheng Molybdenum Co is currently generating about -0.06 per unit of risk. If you would invest 5,197 in General Motors on August 31, 2024 and sell it today you would earn a total of 362.00 from holding General Motors or generate 6.97% 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. Jinduicheng Molybdenum Co
Performance |
| Timeline |
| General Motors |
| Jinduicheng Molybdenum |
GM and Jinduicheng Molybdenum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Jinduicheng Molybdenum
The main advantage of trading using opposite GM and Jinduicheng Molybdenum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Jinduicheng Molybdenum 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 Jinduicheng Molybdenum will offset losses from the drop in Jinduicheng Molybdenum's long position.The idea behind General Motors and Jinduicheng Molybdenum Co 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.| Jinduicheng Molybdenum vs. Shuhua Sports Co | Jinduicheng Molybdenum vs. China World Trade | Jinduicheng Molybdenum vs. Beijing Jiaman Dress | Jinduicheng Molybdenum vs. PKU HealthCare Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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