Correlation Between GM and Grupa KTY
Can any of the company-specific risk be diversified away by investing in both GM and Grupa KTY 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 Grupa KTY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Grupa KTY SA, you can compare the effects of market volatilities on GM and Grupa KTY 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 Grupa KTY. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Grupa KTY.
Diversification Opportunities for GM and Grupa KTY
Pay attention - limited upside
The 3 months correlation between GM and Grupa is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Grupa KTY SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupa KTY SA 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 Grupa KTY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupa KTY SA has no effect on the direction of GM i.e., GM and Grupa KTY go up and down completely randomly.
Pair Corralation between GM and Grupa KTY
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.15 times more return on investment than Grupa KTY. However, GM is 1.15 times more volatile than Grupa KTY SA. It trades about 0.1 of its potential returns per unit of risk. Grupa KTY SA is currently generating about 0.02 per unit of risk. If you would invest 3,331 in General Motors on September 5, 2024 and sell it today you would earn a total of 2,005 from holding General Motors or generate 60.19% 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. Grupa KTY SA
Performance |
Timeline |
General Motors |
Grupa KTY SA |
GM and Grupa KTY Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GM and Grupa KTY
The main advantage of trading using opposite GM and Grupa KTY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Grupa KTY 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 Grupa KTY will offset losses from the drop in Grupa KTY's long position.The idea behind General Motors and Grupa KTY SA 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.Grupa KTY vs. Asseco Business Solutions | Grupa KTY vs. Detalion Games SA | Grupa KTY vs. Kogeneracja SA | Grupa KTY vs. Asseco South Eastern |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |