Correlation Between GM and Konya Cimento
Can any of the company-specific risk be diversified away by investing in both GM and Konya Cimento 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 Konya Cimento into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Konya Cimento Sanayi, you can compare the effects of market volatilities on GM and Konya Cimento 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 Konya Cimento. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Konya Cimento.
Diversification Opportunities for GM and Konya Cimento
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GM and Konya is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Konya Cimento Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konya Cimento Sanayi 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 Konya Cimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konya Cimento Sanayi has no effect on the direction of GM i.e., GM and Konya Cimento go up and down completely randomly.
Pair Corralation between GM and Konya Cimento
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.92 times more return on investment than Konya Cimento. However, General Motors is 1.09 times less risky than Konya Cimento. It trades about 0.08 of its potential returns per unit of risk. Konya Cimento Sanayi is currently generating about -0.05 per unit of risk. If you would invest 4,551 in General Motors on August 31, 2024 and sell it today you would earn a total of 1,008 from holding General Motors or generate 22.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.64% |
| Values | Daily Returns |
General Motors vs. Konya Cimento Sanayi
Performance |
| Timeline |
| General Motors |
| Konya Cimento Sanayi |
GM and Konya Cimento Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Konya Cimento
The main advantage of trading using opposite GM and Konya Cimento positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Konya Cimento 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 Konya Cimento will offset losses from the drop in Konya Cimento's long position.The idea behind General Motors and Konya Cimento Sanayi 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.| Konya Cimento vs. Ege Endustri ve | Konya Cimento vs. Kartonsan Karton Sanayi | Konya Cimento vs. Nuh Cimento Sanayi | Konya Cimento vs. Afyon Cimento Sanayi |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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