Correlation Between GM and Bangsaphan Barmill
Can any of the company-specific risk be diversified away by investing in both GM and Bangsaphan Barmill 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 Bangsaphan Barmill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Bangsaphan Barmill Public, you can compare the effects of market volatilities on GM and Bangsaphan Barmill 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 Bangsaphan Barmill. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Bangsaphan Barmill.
Diversification Opportunities for GM and Bangsaphan Barmill
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between GM and Bangsaphan is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Bangsaphan Barmill Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangsaphan Barmill Public 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 Bangsaphan Barmill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangsaphan Barmill Public has no effect on the direction of GM i.e., GM and Bangsaphan Barmill go up and down completely randomly.
Pair Corralation between GM and Bangsaphan Barmill
Allowing for the 90-day total investment horizon GM is expected to generate 33.39 times less return on investment than Bangsaphan Barmill. But when comparing it to its historical volatility, General Motors is 31.28 times less risky than Bangsaphan Barmill. It trades about 0.05 of its potential returns per unit of risk. Bangsaphan Barmill Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 70.00 in Bangsaphan Barmill Public on November 5, 2024 and sell it today you would earn a total of 2.00 from holding Bangsaphan Barmill Public or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.75% |
| Values | Daily Returns |
General Motors vs. Bangsaphan Barmill Public
Performance |
| Timeline |
| General Motors |
| Bangsaphan Barmill Public |
GM and Bangsaphan Barmill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Bangsaphan Barmill
The main advantage of trading using opposite GM and Bangsaphan Barmill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Bangsaphan Barmill 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 Bangsaphan Barmill will offset losses from the drop in Bangsaphan Barmill's long position.The idea behind General Motors and Bangsaphan Barmill Public 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.| Bangsaphan Barmill vs. Asia Metal Public | Bangsaphan Barmill vs. Chonburi Concrete Product | Bangsaphan Barmill vs. Asia Plus Group | Bangsaphan Barmill vs. CSP Steel Center |
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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