Correlation Between GM and Hsi Malls
Can any of the company-specific risk be diversified away by investing in both GM and Hsi Malls 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 Hsi Malls into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Hsi Malls Fundo, you can compare the effects of market volatilities on GM and Hsi Malls 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 Hsi Malls. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Hsi Malls.
Diversification Opportunities for GM and Hsi Malls
Excellent diversification
The 3 months correlation between GM and Hsi is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Hsi Malls Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsi Malls Fundo 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 Hsi Malls. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsi Malls Fundo has no effect on the direction of GM i.e., GM and Hsi Malls go up and down completely randomly.
Pair Corralation between GM and Hsi Malls
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.59 times more return on investment than Hsi Malls. However, GM is 2.59 times more volatile than Hsi Malls Fundo. It trades about 0.05 of its potential returns per unit of risk. Hsi Malls Fundo is currently generating about 0.04 per unit of risk. If you would invest 3,731 in General Motors on August 27, 2024 and sell it today you would earn a total of 2,122 from holding General Motors or generate 56.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
General Motors vs. Hsi Malls Fundo
Performance |
| Timeline |
| General Motors |
| Hsi Malls Fundo |
GM and Hsi Malls Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Hsi Malls
The main advantage of trading using opposite GM and Hsi Malls positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Hsi Malls 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 Hsi Malls will offset losses from the drop in Hsi Malls' long position.The idea behind General Motors and Hsi Malls Fundo 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.| Hsi Malls vs. Hsi Ativos Financeiros | Hsi Malls vs. Hsi Renda Imobiliario | Hsi Malls vs. Real Estate Investment | Hsi Malls vs. NAVI CRDITO IMOBILIRIO |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |