Correlation Between GM and Dagi Giyim
Can any of the company-specific risk be diversified away by investing in both GM and Dagi Giyim 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 Dagi Giyim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Dagi Giyim Sanayi, you can compare the effects of market volatilities on GM and Dagi Giyim 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 Dagi Giyim. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Dagi Giyim.
Diversification Opportunities for GM and Dagi Giyim
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GM and Dagi is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Dagi Giyim Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dagi Giyim Sanayi 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 Dagi Giyim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dagi Giyim Sanayi has no effect on the direction of GM i.e., GM and Dagi Giyim go up and down completely randomly.
Pair Corralation between GM and Dagi Giyim
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Dagi Giyim. In addition to that, GM is 1.32 times more volatile than Dagi Giyim Sanayi. It trades about -0.15 of its total potential returns per unit of risk. Dagi Giyim Sanayi is currently generating about 0.32 per unit of volatility. If you would invest 1,310 in Dagi Giyim Sanayi on September 13, 2024 and sell it today you would earn a total of 188.00 from holding Dagi Giyim Sanayi or generate 14.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
General Motors vs. Dagi Giyim Sanayi
Performance |
| Timeline |
| General Motors |
| Dagi Giyim Sanayi |
GM and Dagi Giyim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Dagi Giyim
The main advantage of trading using opposite GM and Dagi Giyim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Dagi Giyim 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 Dagi Giyim will offset losses from the drop in Dagi Giyim's long position.The idea behind General Motors and Dagi Giyim Sanayi 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.| Dagi Giyim vs. Cuhadaroglu Metal Sanayi | Dagi Giyim vs. Datagate Bilgisayar Malzemeleri | Dagi Giyim vs. Koza Anadolu Metal | Dagi Giyim vs. Turkish Airlines |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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