Correlation Between GM and EmbedWay TechCorp
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By analyzing existing cross correlation between General Motors and EmbedWay TechCorp, you can compare the effects of market volatilities on GM and EmbedWay TechCorp 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 EmbedWay TechCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and EmbedWay TechCorp.
Diversification Opportunities for GM and EmbedWay TechCorp
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GM and EmbedWay is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and EmbedWay TechCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EmbedWay TechCorp 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 EmbedWay TechCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EmbedWay TechCorp has no effect on the direction of GM i.e., GM and EmbedWay TechCorp go up and down completely randomly.
Pair Corralation between GM and EmbedWay TechCorp
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the EmbedWay TechCorp. But the stock apears to be less risky and, when comparing its historical volatility, General Motors is 1.97 times less risky than EmbedWay TechCorp. The stock trades about -0.05 of its potential returns per unit of risk. The EmbedWay TechCorp is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 2,484 in EmbedWay TechCorp on October 17, 2024 and sell it today you would lose (89.00) from holding EmbedWay TechCorp or give up 3.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
General Motors vs. EmbedWay TechCorp
Performance |
| Timeline |
| General Motors |
| EmbedWay TechCorp |
GM and EmbedWay TechCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and EmbedWay TechCorp
The main advantage of trading using opposite GM and EmbedWay TechCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, EmbedWay TechCorp 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 EmbedWay TechCorp will offset losses from the drop in EmbedWay TechCorp's long position.The idea behind General Motors and EmbedWay TechCorp 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.| EmbedWay TechCorp vs. Haima Automobile Group | EmbedWay TechCorp vs. Tongyu Communication | EmbedWay TechCorp vs. Chengdu Spaceon Electronics | EmbedWay TechCorp vs. Shanghai CEO Environmental |
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 Stocks Directory module to find actively traded stocks across global markets.
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