Correlation Between GM and Source JPX
Specify exactly 2 symbols:
By analyzing existing cross correlation between General Motors and Source JPX Nikkei 400, you can compare the effects of market volatilities on GM and Source JPX 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 Source JPX. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Source JPX.
Diversification Opportunities for GM and Source JPX
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and Source is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Source JPX Nikkei 400 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Source JPX Nikkei 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 Source JPX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Source JPX Nikkei has no effect on the direction of GM i.e., GM and Source JPX go up and down completely randomly.
Pair Corralation between GM and Source JPX
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.7 times more return on investment than Source JPX. However, GM is 1.7 times more volatile than Source JPX Nikkei 400. It trades about 0.09 of its potential returns per unit of risk. Source JPX Nikkei 400 is currently generating about 0.06 per unit of risk. If you would invest 3,227 in General Motors on September 3, 2024 and sell it today you would earn a total of 2,277 from holding General Motors or generate 70.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
General Motors vs. Source JPX Nikkei 400
Performance |
| Timeline |
| General Motors |
| Source JPX Nikkei |
GM and Source JPX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Source JPX
The main advantage of trading using opposite GM and Source JPX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Source JPX 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 Source JPX will offset losses from the drop in Source JPX's long position.The idea behind General Motors and Source JPX Nikkei 400 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.| Source JPX vs. UBS Fund Solutions | Source JPX vs. Xtrackers II | Source JPX vs. Xtrackers Nikkei 225 | Source JPX vs. iShares VII 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |