Correlation Between GM and Autozi Internet
Can any of the company-specific risk be diversified away by investing in both GM and Autozi Internet 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 Autozi Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Autozi Internet Technology, you can compare the effects of market volatilities on GM and Autozi Internet 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 Autozi Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Autozi Internet.
Diversification Opportunities for GM and Autozi Internet
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GM and Autozi is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Autozi Internet Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autozi Internet Tech 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 Autozi Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autozi Internet Tech has no effect on the direction of GM i.e., GM and Autozi Internet go up and down completely randomly.
Pair Corralation between GM and Autozi Internet
Allowing for the 90-day total investment horizon GM is expected to generate 8.47 times less return on investment than Autozi Internet. But when comparing it to its historical volatility, General Motors is 9.26 times less risky than Autozi Internet. It trades about 0.31 of its potential returns per unit of risk. Autozi Internet Technology is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 77.00 in Autozi Internet Technology on August 28, 2024 and sell it today you would earn a total of 92.00 from holding Autozi Internet Technology or generate 119.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
General Motors vs. Autozi Internet Technology
Performance |
| Timeline |
| General Motors |
| Autozi Internet Tech |
GM and Autozi Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Autozi Internet
The main advantage of trading using opposite GM and Autozi Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Autozi Internet 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 Autozi Internet will offset losses from the drop in Autozi Internet's long position.The idea behind General Motors and Autozi Internet Technology 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.| Autozi Internet vs. Ecovyst | Autozi Internet vs. Scandinavian Tobacco Group | Autozi Internet vs. Air Products and | Autozi Internet vs. Luxfer Holdings PLC |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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