Correlation Between GM and ROPEOK Technology
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By analyzing existing cross correlation between General Motors and ROPEOK Technology Group, you can compare the effects of market volatilities on GM and ROPEOK 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 ROPEOK Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and ROPEOK Technology.
Diversification Opportunities for GM and ROPEOK Technology
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GM and ROPEOK is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and ROPEOK Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROPEOK 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 ROPEOK Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROPEOK Technology has no effect on the direction of GM i.e., GM and ROPEOK Technology go up and down completely randomly.
Pair Corralation between GM and ROPEOK Technology
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.61 times more return on investment than ROPEOK Technology. However, General Motors is 1.63 times less risky than ROPEOK Technology. It trades about 0.31 of its potential returns per unit of risk. ROPEOK Technology Group is currently generating about 0.04 per unit of risk. If you would invest 5,273 in General Motors on August 28, 2024 and sell it today you would earn a total of 747.00 from holding General Motors or generate 14.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. ROPEOK Technology Group
Performance |
| Timeline |
| General Motors |
| ROPEOK Technology |
GM and ROPEOK Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and ROPEOK Technology
The main advantage of trading using opposite GM and ROPEOK Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, ROPEOK 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 ROPEOK Technology will offset losses from the drop in ROPEOK Technology's long position.The idea behind General Motors and ROPEOK Technology Group 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.| ROPEOK Technology vs. Guangzhou Boji Medical | ROPEOK Technology vs. Allmed Medical Products | ROPEOK Technology vs. Nanjing Putian Telecommunications | ROPEOK Technology vs. Eastern Communications 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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