Correlation Between GM and GPT Healthcare
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By analyzing existing cross correlation between General Motors and GPT Healthcare, you can compare the effects of market volatilities on GM and GPT Healthcare 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 GPT Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and GPT Healthcare.
Diversification Opportunities for GM and GPT Healthcare
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GM and GPT is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and GPT Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GPT Healthcare 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 GPT Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GPT Healthcare has no effect on the direction of GM i.e., GM and GPT Healthcare go up and down completely randomly.
Pair Corralation between GM and GPT Healthcare
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.7 times more return on investment than GPT Healthcare. However, General Motors is 1.42 times less risky than GPT Healthcare. It trades about 0.11 of its potential returns per unit of risk. GPT Healthcare is currently generating about 0.0 per unit of risk. If you would invest 3,324 in General Motors on September 2, 2024 and sell it today you would earn a total of 2,235 from holding General Motors or generate 67.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 75.81% |
| Values | Daily Returns |
General Motors vs. GPT Healthcare
Performance |
| Timeline |
| General Motors |
| GPT Healthcare |
GM and GPT Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and GPT Healthcare
The main advantage of trading using opposite GM and GPT Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, GPT Healthcare 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 GPT Healthcare will offset losses from the drop in GPT Healthcare's long position.The idea behind General Motors and GPT Healthcare 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.| GPT Healthcare vs. Apollo Hospitals Enterprise | GPT Healthcare vs. Max Healthcare Institute | GPT Healthcare vs. Fortis Healthcare Limited | GPT Healthcare vs. Global Health 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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