Correlation Between GM and Chalet Hotels
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By analyzing existing cross correlation between General Motors and Chalet Hotels Limited, you can compare the effects of market volatilities on GM and Chalet Hotels 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 Chalet Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Chalet Hotels.
Diversification Opportunities for GM and Chalet Hotels
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and Chalet is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Chalet Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chalet Hotels Limited 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 Chalet Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chalet Hotels Limited has no effect on the direction of GM i.e., GM and Chalet Hotels go up and down completely randomly.
Pair Corralation between GM and Chalet Hotels
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.95 times more return on investment than Chalet Hotels. However, General Motors is 1.05 times less risky than Chalet Hotels. It trades about 0.03 of its potential returns per unit of risk. Chalet Hotels Limited is currently generating about -0.03 per unit of risk. If you would invest 5,261 in General Motors on October 26, 2024 and sell it today you would earn a total of 161.00 from holding General Motors or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.72% |
| Values | Daily Returns |
General Motors vs. Chalet Hotels Limited
Performance |
| Timeline |
| General Motors |
| Chalet Hotels Limited |
GM and Chalet Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Chalet Hotels
The main advantage of trading using opposite GM and Chalet Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Chalet Hotels 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 Chalet Hotels will offset losses from the drop in Chalet Hotels' long position.The idea behind General Motors and Chalet Hotels 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.| Chalet Hotels vs. Steel Authority of | Chalet Hotels vs. Zenith Steel Pipes | Chalet Hotels vs. Man Infraconstruction Limited | Chalet Hotels vs. Kalyani Steels Limited |
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 Stocks Directory module to find actively traded stocks across global markets.
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