Correlation Between GM and Sirakorn PCL
Can any of the company-specific risk be diversified away by investing in both GM and Sirakorn PCL 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 Sirakorn PCL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Sirakorn PCL, you can compare the effects of market volatilities on GM and Sirakorn PCL 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 Sirakorn PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Sirakorn PCL.
Diversification Opportunities for GM and Sirakorn PCL
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Sirakorn is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Sirakorn PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sirakorn PCL 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 Sirakorn PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sirakorn PCL has no effect on the direction of GM i.e., GM and Sirakorn PCL go up and down completely randomly.
Pair Corralation between GM and Sirakorn PCL
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.19 times more return on investment than Sirakorn PCL. However, GM is 1.19 times more volatile than Sirakorn PCL. It trades about 0.1 of its potential returns per unit of risk. Sirakorn PCL is currently generating about -0.06 per unit of risk. If you would invest 4,829 in General Motors on September 3, 2024 and sell it today you would earn a total of 730.00 from holding General Motors or generate 15.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
General Motors vs. Sirakorn PCL
Performance |
| Timeline |
| General Motors |
| Sirakorn PCL |
GM and Sirakorn PCL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Sirakorn PCL
The main advantage of trading using opposite GM and Sirakorn PCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Sirakorn PCL 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 Sirakorn PCL will offset losses from the drop in Sirakorn PCL's long position.The idea behind General Motors and Sirakorn PCL 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.| Sirakorn PCL vs. Aqua Public | Sirakorn PCL vs. Union Auction Public | Sirakorn PCL vs. Ama Marine Public | Sirakorn PCL vs. Akkhie Prakarn 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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