Correlation Between GM and Domiki Kritis
Can any of the company-specific risk be diversified away by investing in both GM and Domiki Kritis 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 Domiki Kritis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Domiki Kritis SA, you can compare the effects of market volatilities on GM and Domiki Kritis 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 Domiki Kritis. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Domiki Kritis.
Diversification Opportunities for GM and Domiki Kritis
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Domiki is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Domiki Kritis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Domiki Kritis SA 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 Domiki Kritis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Domiki Kritis SA has no effect on the direction of GM i.e., GM and Domiki Kritis go up and down completely randomly.
Pair Corralation between GM and Domiki Kritis
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.89 times more return on investment than Domiki Kritis. However, General Motors is 1.13 times less risky than Domiki Kritis. It trades about 0.2 of its potential returns per unit of risk. Domiki Kritis SA is currently generating about -0.09 per unit of risk. If you would invest 4,484 in General Motors on August 30, 2024 and sell it today you would earn a total of 1,066 from holding General Motors or generate 23.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
General Motors vs. Domiki Kritis SA
Performance |
| Timeline |
| General Motors |
| Domiki Kritis SA |
GM and Domiki Kritis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Domiki Kritis
The main advantage of trading using opposite GM and Domiki Kritis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Domiki Kritis 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 Domiki Kritis will offset losses from the drop in Domiki Kritis' long position.The idea behind General Motors and Domiki Kritis SA 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.| Domiki Kritis vs. Intracom Holdings SA | Domiki Kritis vs. Intralot SA Integrated | Domiki Kritis vs. Intracom Constructions Societe | Domiki Kritis vs. Ekter SA |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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