Correlation Between GM and Pricol
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By analyzing existing cross correlation between General Motors and Pricol Limited, you can compare the effects of market volatilities on GM and Pricol 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 Pricol. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Pricol.
Diversification Opportunities for GM and Pricol
Very good diversification
The 3 months correlation between GM and Pricol is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Pricol Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pricol 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 Pricol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pricol Limited has no effect on the direction of GM i.e., GM and Pricol go up and down completely randomly.
Pair Corralation between GM and Pricol
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.02 times more return on investment than Pricol. However, GM is 1.02 times more volatile than Pricol Limited. It trades about 0.26 of its potential returns per unit of risk. Pricol Limited is currently generating about 0.06 per unit of risk. If you would invest 5,273 in General Motors on August 27, 2024 and sell it today you would earn a total of 580.00 from holding General Motors or generate 11.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
General Motors vs. Pricol Limited
Performance |
| Timeline |
| General Motors |
| Pricol Limited |
GM and Pricol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Pricol
The main advantage of trading using opposite GM and Pricol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Pricol 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 Pricol will offset losses from the drop in Pricol's long position.The idea behind General Motors and Pricol 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.| Pricol vs. ILFS Investment Managers | Pricol vs. NMDC Steel Limited | Pricol vs. Aban Offshore Limited | Pricol vs. HDFC Asset Management |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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