Correlation Between GM and Kamdar Group
Can any of the company-specific risk be diversified away by investing in both GM and Kamdar Group at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GM and Kamdar Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Kamdar Group Bhd, you can compare the effects of market volatilities on GM and Kamdar Group 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 Kamdar Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Kamdar Group.
Diversification Opportunities for GM and Kamdar Group
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GM and Kamdar is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Kamdar Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamdar Group Bhd 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 Kamdar Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kamdar Group Bhd has no effect on the direction of GM i.e., GM and Kamdar Group go up and down completely randomly.
Pair Corralation between GM and Kamdar Group
Allowing for the 90-day total investment horizon GM is expected to generate 1.95 times less return on investment than Kamdar Group. But when comparing it to its historical volatility, General Motors is 2.85 times less risky than Kamdar Group. It trades about 0.09 of its potential returns per unit of risk. Kamdar Group Bhd is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Kamdar Group Bhd on September 3, 2024 and sell it today you would earn a total of 16.00 from holding Kamdar Group Bhd or generate 88.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.06% |
| Values | Daily Returns |
General Motors vs. Kamdar Group Bhd
Performance |
| Timeline |
| General Motors |
| Kamdar Group Bhd |
GM and Kamdar Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Kamdar Group
The main advantage of trading using opposite GM and Kamdar Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Kamdar Group 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 Kamdar Group will offset losses from the drop in Kamdar Group's long position.The idea behind General Motors and Kamdar Group Bhd 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.| Kamdar Group vs. ONETECH SOLUTIONS HOLDINGS | Kamdar Group vs. Minetech Resources Bhd | Kamdar Group vs. Daya Materials Bhd | Kamdar Group vs. Supercomnet Technologies Bhd |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| CEOs Directory Screen CEOs from public companies around the world |