Correlation Between GM and Semacom Integrated
Can any of the company-specific risk be diversified away by investing in both GM and Semacom Integrated 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 Semacom Integrated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Semacom Integrated Tbk, you can compare the effects of market volatilities on GM and Semacom Integrated 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 Semacom Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Semacom Integrated.
Diversification Opportunities for GM and Semacom Integrated
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Semacom is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Semacom Integrated Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semacom Integrated 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 Semacom Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semacom Integrated Tbk has no effect on the direction of GM i.e., GM and Semacom Integrated go up and down completely randomly.
Pair Corralation between GM and Semacom Integrated
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.55 times more return on investment than Semacom Integrated. However, General Motors is 1.83 times less risky than Semacom Integrated. It trades about 0.09 of its potential returns per unit of risk. Semacom Integrated Tbk is currently generating about 0.03 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 Against |
| Strength | Significant |
| Accuracy | 95.48% |
| Values | Daily Returns |
General Motors vs. Semacom Integrated Tbk
Performance |
| Timeline |
| General Motors |
| Semacom Integrated Tbk |
GM and Semacom Integrated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Semacom Integrated
The main advantage of trading using opposite GM and Semacom Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Semacom Integrated 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 Semacom Integrated will offset losses from the drop in Semacom Integrated's long position.The idea behind General Motors and Semacom Integrated 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.| Semacom Integrated vs. PT Jobubu Jarum | Semacom Integrated vs. PT Dewi Shri | Semacom Integrated vs. PT Data Sinergitama | Semacom Integrated vs. PAM Mineral Tbk |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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