Correlation Between GM and Kaushalya Infrastructure
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By analyzing existing cross correlation between General Motors and Kaushalya Infrastructure Development, you can compare the effects of market volatilities on GM and Kaushalya Infrastructure 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 Kaushalya Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Kaushalya Infrastructure.
Diversification Opportunities for GM and Kaushalya Infrastructure
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GM and Kaushalya is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Kaushalya Infrastructure Devel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaushalya Infrastructure 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 Kaushalya Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaushalya Infrastructure has no effect on the direction of GM i.e., GM and Kaushalya Infrastructure go up and down completely randomly.
Pair Corralation between GM and Kaushalya Infrastructure
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.29 times more return on investment than Kaushalya Infrastructure. However, GM is 1.29 times more volatile than Kaushalya Infrastructure Development. It trades about 0.24 of its potential returns per unit of risk. Kaushalya Infrastructure Development is currently generating about 0.18 per unit of risk. If you would invest 5,272 in General Motors on August 25, 2024 and sell it today you would earn a total of 581.00 from holding General Motors or generate 11.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
General Motors vs. Kaushalya Infrastructure Devel
Performance |
| Timeline |
| General Motors |
| Kaushalya Infrastructure |
GM and Kaushalya Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Kaushalya Infrastructure
The main advantage of trading using opposite GM and Kaushalya Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Kaushalya Infrastructure 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 Kaushalya Infrastructure will offset losses from the drop in Kaushalya Infrastructure's long position.The idea behind General Motors and Kaushalya Infrastructure Development 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.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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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