Correlation Between GM and TECIL Chemicals
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By analyzing existing cross correlation between General Motors and TECIL Chemicals and, you can compare the effects of market volatilities on GM and TECIL Chemicals 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 TECIL Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and TECIL Chemicals.
Diversification Opportunities for GM and TECIL Chemicals
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between GM and TECIL is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and TECIL Chemicals and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TECIL Chemicals 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 TECIL Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TECIL Chemicals has no effect on the direction of GM i.e., GM and TECIL Chemicals go up and down completely randomly.
Pair Corralation between GM and TECIL Chemicals
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the TECIL Chemicals. But the stock apears to be less risky and, when comparing its historical volatility, General Motors is 1.1 times less risky than TECIL Chemicals. The stock trades about -0.15 of its potential returns per unit of risk. The TECIL Chemicals and is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,491 in TECIL Chemicals and on November 7, 2024 and sell it today you would lose (51.00) from holding TECIL Chemicals and or give up 2.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
General Motors vs. TECIL Chemicals and
Performance |
| Timeline |
| General Motors |
| TECIL Chemicals |
GM and TECIL Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and TECIL Chemicals
The main advantage of trading using opposite GM and TECIL Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, TECIL Chemicals 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 TECIL Chemicals will offset losses from the drop in TECIL Chemicals' long position.The idea behind General Motors and TECIL Chemicals and 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.| TECIL Chemicals vs. Styrenix Performance Materials | TECIL Chemicals vs. Rainbow Childrens Medicare | TECIL Chemicals vs. Spencers Retail Limited | TECIL Chemicals vs. Elgi Rubber |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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