Correlation Between GM and Itthirit Nice
Can any of the company-specific risk be diversified away by investing in both GM and Itthirit Nice 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 Itthirit Nice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Itthirit Nice Corp, you can compare the effects of market volatilities on GM and Itthirit Nice 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 Itthirit Nice. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Itthirit Nice.
Diversification Opportunities for GM and Itthirit Nice
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GM and Itthirit is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Itthirit Nice Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itthirit Nice Corp 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 Itthirit Nice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itthirit Nice Corp has no effect on the direction of GM i.e., GM and Itthirit Nice go up and down completely randomly.
Pair Corralation between GM and Itthirit Nice
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.5 times more return on investment than Itthirit Nice. However, General Motors is 2.02 times less risky than Itthirit Nice. It trades about 0.05 of its potential returns per unit of risk. Itthirit Nice Corp is currently generating about -0.01 per unit of risk. If you would invest 3,297 in General Motors on September 19, 2024 and sell it today you would earn a total of 1,702 from holding General Motors or generate 51.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.28% |
| Values | Daily Returns |
General Motors vs. Itthirit Nice Corp
Performance |
| Timeline |
| General Motors |
| Itthirit Nice Corp |
GM and Itthirit Nice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Itthirit Nice
The main advantage of trading using opposite GM and Itthirit Nice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Itthirit Nice 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 Itthirit Nice will offset losses from the drop in Itthirit Nice's long position.The idea behind General Motors and Itthirit Nice Corp 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.| Itthirit Nice vs. 2S Metal Public | Itthirit Nice vs. Thai Coating Industrial | Itthirit Nice vs. CPR Gomu Industrial | Itthirit Nice vs. Bangkok Sheet Metal |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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