Correlation Between GM and Nafpaktos Textile
Can any of the company-specific risk be diversified away by investing in both GM and Nafpaktos Textile 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 Nafpaktos Textile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Nafpaktos Textile Industry, you can compare the effects of market volatilities on GM and Nafpaktos Textile 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 Nafpaktos Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Nafpaktos Textile.
Diversification Opportunities for GM and Nafpaktos Textile
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GM and Nafpaktos is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Nafpaktos Textile Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nafpaktos Textile 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 Nafpaktos Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nafpaktos Textile has no effect on the direction of GM i.e., GM and Nafpaktos Textile go up and down completely randomly.
Pair Corralation between GM and Nafpaktos Textile
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.77 times more return on investment than Nafpaktos Textile. However, General Motors is 1.3 times less risky than Nafpaktos Textile. It trades about 0.05 of its potential returns per unit of risk. Nafpaktos Textile Industry is currently generating about -0.01 per unit of risk. If you would invest 3,554 in General Motors on September 19, 2024 and sell it today you would earn a total of 1,561 from holding General Motors or generate 43.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.95% |
| Values | Daily Returns |
General Motors vs. Nafpaktos Textile Industry
Performance |
| Timeline |
| General Motors |
| Nafpaktos Textile |
GM and Nafpaktos Textile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Nafpaktos Textile
The main advantage of trading using opposite GM and Nafpaktos Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Nafpaktos Textile 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 Nafpaktos Textile will offset losses from the drop in Nafpaktos Textile's long position.The idea behind General Motors and Nafpaktos Textile Industry 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.| Nafpaktos Textile vs. Lanakam SA | Nafpaktos Textile vs. Bioter SA | Nafpaktos Textile vs. Avax SA | Nafpaktos Textile vs. National Bank of |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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