Correlation Between GM and NLC India
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By analyzing existing cross correlation between General Motors and NLC India Limited, you can compare the effects of market volatilities on GM and NLC India 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 NLC India. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and NLC India.
Diversification Opportunities for GM and NLC India
Pay attention - limited upside
The 3 months correlation between GM and NLC is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and NLC India Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NLC India Limited 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 NLC India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NLC India Limited has no effect on the direction of GM i.e., GM and NLC India go up and down completely randomly.
Pair Corralation between GM and NLC India
Allowing for the 90-day total investment horizon GM is expected to generate 2.67 times less return on investment than NLC India. But when comparing it to its historical volatility, General Motors is 1.45 times less risky than NLC India. It trades about 0.06 of its potential returns per unit of risk. NLC India Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 7,394 in NLC India Limited on September 13, 2024 and sell it today you would earn a total of 18,976 from holding NLC India Limited or generate 256.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.18% |
| Values | Daily Returns |
General Motors vs. NLC India Limited
Performance |
| Timeline |
| General Motors |
| NLC India Limited |
GM and NLC India Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and NLC India
The main advantage of trading using opposite GM and NLC India positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, NLC India 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 NLC India will offset losses from the drop in NLC India's long position.The idea behind General Motors and NLC India 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.| NLC India vs. Vodafone Idea Limited | NLC India vs. Yes Bank Limited | NLC India vs. Indian Overseas Bank | NLC India vs. Indian Oil |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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