Correlation Between GM and Singapore Exchange
Can any of the company-specific risk be diversified away by investing in both GM and Singapore Exchange 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 Singapore Exchange into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Singapore Exchange Limited, you can compare the effects of market volatilities on GM and Singapore Exchange 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 Singapore Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Singapore Exchange.
Diversification Opportunities for GM and Singapore Exchange
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and Singapore is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Singapore Exchange Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Exchange 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 Singapore Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Exchange has no effect on the direction of GM i.e., GM and Singapore Exchange go up and down completely randomly.
Pair Corralation between GM and Singapore Exchange
Allowing for the 90-day total investment horizon GM is expected to generate 1.12 times less return on investment than Singapore Exchange. But when comparing it to its historical volatility, General Motors is 1.34 times less risky than Singapore Exchange. It trades about 0.06 of its potential returns per unit of risk. Singapore Exchange Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 616.00 in Singapore Exchange Limited on August 28, 2024 and sell it today you would earn a total of 325.00 from holding Singapore Exchange Limited or generate 52.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
General Motors vs. Singapore Exchange Limited
Performance |
| Timeline |
| General Motors |
| Singapore Exchange |
GM and Singapore Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Singapore Exchange
The main advantage of trading using opposite GM and Singapore Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Singapore Exchange 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 Singapore Exchange will offset losses from the drop in Singapore Exchange's long position.The idea behind General Motors and Singapore Exchange 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.| Singapore Exchange vs. Hong Kong Exchanges | Singapore Exchange vs. Deutsche Boerse AG | Singapore Exchange vs. SP Global | Singapore Exchange vs. Moodys |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |