Correlation Between GM and Bank Nationalnobu
Can any of the company-specific risk be diversified away by investing in both GM and Bank Nationalnobu 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 Bank Nationalnobu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Bank Nationalnobu Tbk, you can compare the effects of market volatilities on GM and Bank Nationalnobu 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 Bank Nationalnobu. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Bank Nationalnobu.
Diversification Opportunities for GM and Bank Nationalnobu
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and Bank is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Bank Nationalnobu Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Nationalnobu Tbk 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 Bank Nationalnobu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Nationalnobu Tbk has no effect on the direction of GM i.e., GM and Bank Nationalnobu go up and down completely randomly.
Pair Corralation between GM and Bank Nationalnobu
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.56 times more return on investment than Bank Nationalnobu. However, GM is 1.56 times more volatile than Bank Nationalnobu Tbk. It trades about 0.13 of its potential returns per unit of risk. Bank Nationalnobu Tbk is currently generating about 0.07 per unit of risk. If you would invest 5,154 in General Motors on August 30, 2024 and sell it today you would earn a total of 396.00 from holding General Motors or generate 7.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Bank Nationalnobu Tbk
Performance |
| Timeline |
| General Motors |
| Bank Nationalnobu Tbk |
GM and Bank Nationalnobu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Bank Nationalnobu
The main advantage of trading using opposite GM and Bank Nationalnobu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Bank Nationalnobu 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 Bank Nationalnobu will offset losses from the drop in Bank Nationalnobu's long position.The idea behind General Motors and Bank Nationalnobu Tbk 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.| Bank Nationalnobu vs. Trinitan Metals and | Bank Nationalnobu vs. Metrodata Electronics Tbk | Bank Nationalnobu vs. Alumindo Light Metal | Bank Nationalnobu vs. Lion Metal Works |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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