Correlation Between GM and NPF MICRO
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By analyzing existing cross correlation between General Motors and NPF MICRO FINANCE, you can compare the effects of market volatilities on GM and NPF MICRO 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 NPF MICRO. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and NPF MICRO.
Diversification Opportunities for GM and NPF MICRO
Pay attention - limited upside
The 3 months correlation between GM and NPF is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and NPF MICRO FINANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NPF MICRO FINANCE 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 NPF MICRO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NPF MICRO FINANCE has no effect on the direction of GM i.e., GM and NPF MICRO go up and down completely randomly.
Pair Corralation between GM and NPF MICRO
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.68 times more return on investment than NPF MICRO. However, General Motors is 1.46 times less risky than NPF MICRO. It trades about 0.11 of its potential returns per unit of risk. NPF MICRO FINANCE is currently generating about -0.02 per unit of risk. If you would invest 3,348 in General Motors on September 3, 2024 and sell it today you would earn a total of 2,156 from holding General Motors or generate 64.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.38% |
| Values | Daily Returns |
General Motors vs. NPF MICRO FINANCE
Performance |
| Timeline |
| General Motors |
| NPF MICRO FINANCE |
GM and NPF MICRO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and NPF MICRO
The main advantage of trading using opposite GM and NPF MICRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, NPF MICRO 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 NPF MICRO will offset losses from the drop in NPF MICRO's long position.The idea behind General Motors and NPF MICRO FINANCE 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.| NPF MICRO vs. ASO SAVINGS AND | NPF MICRO vs. STERLING FINANCIAL HOLDINGS | NPF MICRO vs. SECURE ELECTRONIC TECHNOLOGY | NPF MICRO vs. ZENITH BANK PLC |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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