Correlation Between GM and Nusasiri Public
Can any of the company-specific risk be diversified away by investing in both GM and Nusasiri Public 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 Nusasiri Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Nusasiri Public, you can compare the effects of market volatilities on GM and Nusasiri Public 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 Nusasiri Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Nusasiri Public.
Diversification Opportunities for GM and Nusasiri Public
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Nusasiri is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Nusasiri Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nusasiri Public 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 Nusasiri Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nusasiri Public has no effect on the direction of GM i.e., GM and Nusasiri Public go up and down completely randomly.
Pair Corralation between GM and Nusasiri Public
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.49 times more return on investment than Nusasiri Public. However, General Motors is 2.04 times less risky than Nusasiri Public. It trades about -0.16 of its potential returns per unit of risk. Nusasiri Public is currently generating about -0.09 per unit of risk. If you would invest 5,728 in General Motors on September 13, 2024 and sell it today you would lose (515.50) from holding General Motors or give up 9.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
General Motors vs. Nusasiri Public
Performance |
| Timeline |
| General Motors |
| Nusasiri Public |
GM and Nusasiri Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Nusasiri Public
The main advantage of trading using opposite GM and Nusasiri Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Nusasiri Public 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 Nusasiri Public will offset losses from the drop in Nusasiri Public's long position.The idea behind General Motors and Nusasiri Public 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.| Nusasiri Public vs. Wave Entertainment Public | Nusasiri Public vs. Vibhavadi Medical Center | Nusasiri Public vs. VGI Public | Nusasiri Public vs. WHA Public |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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