Correlation Between GM and Arvind Fashions
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By analyzing existing cross correlation between General Motors and Arvind Fashions Limited, you can compare the effects of market volatilities on GM and Arvind Fashions 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 Arvind Fashions. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Arvind Fashions.
Diversification Opportunities for GM and Arvind Fashions
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GM and Arvind is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Arvind Fashions Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arvind Fashions 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 Arvind Fashions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arvind Fashions has no effect on the direction of GM i.e., GM and Arvind Fashions go up and down completely randomly.
Pair Corralation between GM and Arvind Fashions
Allowing for the 90-day total investment horizon GM is expected to generate 1.42 times less return on investment than Arvind Fashions. But when comparing it to its historical volatility, General Motors is 1.07 times less risky than Arvind Fashions. It trades about 0.05 of its potential returns per unit of risk. Arvind Fashions Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 32,126 in Arvind Fashions Limited on September 2, 2024 and sell it today you would earn a total of 24,774 from holding Arvind Fashions Limited or generate 77.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.59% |
| Values | Daily Returns |
General Motors vs. Arvind Fashions Limited
Performance |
| Timeline |
| General Motors |
| Arvind Fashions |
GM and Arvind Fashions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Arvind Fashions
The main advantage of trading using opposite GM and Arvind Fashions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Arvind Fashions 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 Arvind Fashions will offset losses from the drop in Arvind Fashions' long position.The idea behind General Motors and Arvind Fashions Limited 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.| Arvind Fashions vs. Tips Music Limited | Arvind Fashions vs. Nalwa Sons Investments | Arvind Fashions vs. POWERGRID Infrastructure Investment | Arvind Fashions vs. Bajaj Holdings 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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