Correlation Between GM and WuXi Xinje
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By analyzing existing cross correlation between General Motors and WuXi Xinje Electric, you can compare the effects of market volatilities on GM and WuXi Xinje 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 WuXi Xinje. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and WuXi Xinje.
Diversification Opportunities for GM and WuXi Xinje
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between GM and WuXi is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and WuXi Xinje Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi Xinje Electric 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 WuXi Xinje. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi Xinje Electric has no effect on the direction of GM i.e., GM and WuXi Xinje go up and down completely randomly.
Pair Corralation between GM and WuXi Xinje
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.79 times more return on investment than WuXi Xinje. However, General Motors is 1.27 times less risky than WuXi Xinje. It trades about 0.04 of its potential returns per unit of risk. WuXi Xinje Electric is currently generating about 0.0 per unit of risk. If you would invest 3,545 in General Motors on October 15, 2024 and sell it today you would earn a total of 1,440 from holding General Motors or generate 40.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.57% |
| Values | Daily Returns |
General Motors vs. WuXi Xinje Electric
Performance |
| Timeline |
| General Motors |
| WuXi Xinje Electric |
GM and WuXi Xinje Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and WuXi Xinje
The main advantage of trading using opposite GM and WuXi Xinje positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, WuXi Xinje 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 WuXi Xinje will offset losses from the drop in WuXi Xinje's long position.The idea behind General Motors and WuXi Xinje Electric 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.| WuXi Xinje vs. Hunan Mendale Hometextile | WuXi Xinje vs. Jinlong Machinery Electronic | WuXi Xinje vs. Qumei Furniture Group | WuXi Xinje vs. Aurora Optoelectronics Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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