Correlation Between GM and SKijchai Enterprise
Can any of the company-specific risk be diversified away by investing in both GM and SKijchai Enterprise 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 SKijchai Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and SKijchai Enterprise Public, you can compare the effects of market volatilities on GM and SKijchai Enterprise 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 SKijchai Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and SKijchai Enterprise.
Diversification Opportunities for GM and SKijchai Enterprise
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between GM and SKijchai is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and SKijchai Enterprise Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKijchai Enterprise 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 SKijchai Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKijchai Enterprise has no effect on the direction of GM i.e., GM and SKijchai Enterprise go up and down completely randomly.
Pair Corralation between GM and SKijchai Enterprise
Allowing for the 90-day total investment horizon GM is expected to generate 18.12 times less return on investment than SKijchai Enterprise. But when comparing it to its historical volatility, General Motors is 25.23 times less risky than SKijchai Enterprise. It trades about 0.06 of its potential returns per unit of risk. SKijchai Enterprise Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 420.00 in SKijchai Enterprise Public on October 24, 2024 and sell it today you would earn a total of 120.00 from holding SKijchai Enterprise Public or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.57% |
| Values | Daily Returns |
General Motors vs. SKijchai Enterprise Public
Performance |
| Timeline |
| General Motors |
| SKijchai Enterprise |
GM and SKijchai Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and SKijchai Enterprise
The main advantage of trading using opposite GM and SKijchai Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, SKijchai Enterprise 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 SKijchai Enterprise will offset losses from the drop in SKijchai Enterprise's long position.The idea behind General Motors and SKijchai Enterprise 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.| SKijchai Enterprise vs. Tipco Foods Public | SKijchai Enterprise vs. STPI Public | SKijchai Enterprise vs. Seafco Public | SKijchai Enterprise vs. Tipco Asphalt 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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