Correlation Between GM and NetSol Technologies
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By analyzing existing cross correlation between General Motors and NetSol Technologies, you can compare the effects of market volatilities on GM and NetSol Technologies 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 NetSol Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and NetSol Technologies.
Diversification Opportunities for GM and NetSol Technologies
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GM and NetSol is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and NetSol Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetSol Technologies 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 NetSol Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetSol Technologies has no effect on the direction of GM i.e., GM and NetSol Technologies go up and down completely randomly.
Pair Corralation between GM and NetSol Technologies
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.08 times more return on investment than NetSol Technologies. However, GM is 1.08 times more volatile than NetSol Technologies. It trades about -0.06 of its potential returns per unit of risk. NetSol Technologies is currently generating about -0.1 per unit of risk. If you would invest 5,177 in General Motors on November 4, 2024 and sell it today you would lose (231.00) from holding General Motors or give up 4.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
General Motors vs. NetSol Technologies
Performance |
| Timeline |
| General Motors |
| NetSol Technologies |
GM and NetSol Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and NetSol Technologies
The main advantage of trading using opposite GM and NetSol Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, NetSol Technologies 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 NetSol Technologies will offset losses from the drop in NetSol Technologies' long position.The idea behind General Motors and NetSol Technologies 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.| NetSol Technologies vs. Bawany Air Products | NetSol Technologies vs. IGI Life Insurance | NetSol Technologies vs. Pakistan Telecommunication | NetSol Technologies vs. Jubilee Life Insurance |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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