Correlation Between GM and Bangyan Technology
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By analyzing existing cross correlation between General Motors and Bangyan Technology Co, you can compare the effects of market volatilities on GM and Bangyan Technology 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 Bangyan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Bangyan Technology.
Diversification Opportunities for GM and Bangyan Technology
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GM and Bangyan is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Bangyan Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangyan Technology 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 Bangyan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangyan Technology has no effect on the direction of GM i.e., GM and Bangyan Technology go up and down completely randomly.
Pair Corralation between GM and Bangyan Technology
Allowing for the 90-day total investment horizon GM is expected to generate 1.7 times less return on investment than Bangyan Technology. But when comparing it to its historical volatility, General Motors is 1.69 times less risky than Bangyan Technology. It trades about 0.06 of its potential returns per unit of risk. Bangyan Technology Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,248 in Bangyan Technology Co on November 3, 2024 and sell it today you would earn a total of 534.00 from holding Bangyan Technology Co or generate 42.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.76% |
| Values | Daily Returns |
General Motors vs. Bangyan Technology Co
Performance |
| Timeline |
| General Motors |
| Bangyan Technology |
GM and Bangyan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Bangyan Technology
The main advantage of trading using opposite GM and Bangyan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Bangyan Technology 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 Bangyan Technology will offset losses from the drop in Bangyan Technology's long position.The idea behind General Motors and Bangyan Technology 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.| Bangyan Technology vs. Shaanxi Energy Investment | Bangyan Technology vs. Jiangsu GDK Biotechnology | Bangyan Technology vs. Shenzhen Topway Video | Bangyan Technology vs. Beijing Mainstreets Investment |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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