Correlation Between GM and Next Mediaworks
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By analyzing existing cross correlation between General Motors and Next Mediaworks Limited, you can compare the effects of market volatilities on GM and Next Mediaworks 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 Next Mediaworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Next Mediaworks.
Diversification Opportunities for GM and Next Mediaworks
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GM and Next is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Next Mediaworks Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Mediaworks 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 Next Mediaworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Mediaworks has no effect on the direction of GM i.e., GM and Next Mediaworks go up and down completely randomly.
Pair Corralation between GM and Next Mediaworks
Allowing for the 90-day total investment horizon GM is expected to generate 3.43 times less return on investment than Next Mediaworks. But when comparing it to its historical volatility, General Motors is 2.63 times less risky than Next Mediaworks. It trades about 0.17 of its potential returns per unit of risk. Next Mediaworks Limited is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 686.00 in Next Mediaworks Limited on September 1, 2024 and sell it today you would earn a total of 228.00 from holding Next Mediaworks Limited or generate 33.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Next Mediaworks Limited
Performance |
| Timeline |
| General Motors |
| Next Mediaworks |
GM and Next Mediaworks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Next Mediaworks
The main advantage of trading using opposite GM and Next Mediaworks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Next Mediaworks 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 Next Mediaworks will offset losses from the drop in Next Mediaworks' long position.The idea behind General Motors and Next Mediaworks Limited 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.| Next Mediaworks vs. Advani Hotels Resorts | Next Mediaworks vs. Elgi Rubber | Next Mediaworks vs. MIRC Electronics Limited | Next Mediaworks vs. Styrenix Performance Materials |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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