Correlation Between GM and Tanke Incorporated
Can any of the company-specific risk be diversified away by investing in both GM and Tanke Incorporated 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 Tanke Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Tanke Incorporated, you can compare the effects of market volatilities on GM and Tanke Incorporated 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 Tanke Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Tanke Incorporated.
Diversification Opportunities for GM and Tanke Incorporated
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Tanke is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Tanke Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tanke Incorporated 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 Tanke Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tanke Incorporated has no effect on the direction of GM i.e., GM and Tanke Incorporated go up and down completely randomly.
Pair Corralation between GM and Tanke Incorporated
If you would invest 3,835 in General Motors on October 24, 2024 and sell it today you would earn a total of 1,554 from holding General Motors or generate 40.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Tanke Incorporated
Performance |
| Timeline |
| General Motors |
| Tanke Incorporated |
GM and Tanke Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Tanke Incorporated
The main advantage of trading using opposite GM and Tanke Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Tanke Incorporated 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 Tanke Incorporated will offset losses from the drop in Tanke Incorporated's long position.The idea behind General Motors and Tanke Incorporated 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.| Tanke Incorporated vs. EnviroTechnologies International | Tanke Incorporated vs. Atmus Filtration Technologies | Tanke Incorporated vs. Energy and Water | Tanke Incorporated vs. ClearSign Combustion |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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