Correlation Between GM and Muangthai Capital
Can any of the company-specific risk be diversified away by investing in both GM and Muangthai Capital 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 Muangthai Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Muangthai Capital Public, you can compare the effects of market volatilities on GM and Muangthai Capital 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 Muangthai Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Muangthai Capital.
Diversification Opportunities for GM and Muangthai Capital
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GM and Muangthai is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Muangthai Capital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muangthai Capital Public 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 Muangthai Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muangthai Capital Public has no effect on the direction of GM i.e., GM and Muangthai Capital go up and down completely randomly.
Pair Corralation between GM and Muangthai Capital
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.65 times more return on investment than Muangthai Capital. However, GM is 1.65 times more volatile than Muangthai Capital Public. It trades about -0.05 of its potential returns per unit of risk. Muangthai Capital Public is currently generating about -0.16 per unit of risk. If you would invest 5,137 in General Motors on November 3, 2024 and sell it today you would lose (191.00) from holding General Motors or give up 3.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
General Motors vs. Muangthai Capital Public
Performance |
| Timeline |
| General Motors |
| Muangthai Capital Public |
GM and Muangthai Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Muangthai Capital
The main advantage of trading using opposite GM and Muangthai Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Muangthai Capital 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 Muangthai Capital will offset losses from the drop in Muangthai Capital's long position.The idea behind General Motors and Muangthai Capital Public 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.| Muangthai Capital vs. Srisawad Power 1979 | Muangthai Capital vs. Gulf Energy Development | Muangthai Capital vs. Krungthai Card PCL | Muangthai Capital vs. Carabao Group Public |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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