Correlation Between GM and Sinclair
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By analyzing existing cross correlation between General Motors and Sinclair Television Group, you can compare the effects of market volatilities on GM and Sinclair 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 Sinclair. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Sinclair.
Diversification Opportunities for GM and Sinclair
Weak diversification
The 3 months correlation between GM and Sinclair is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Sinclair Television Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinclair Television 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 Sinclair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinclair Television has no effect on the direction of GM i.e., GM and Sinclair go up and down completely randomly.
Pair Corralation between GM and Sinclair
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.47 times more return on investment than Sinclair. However, GM is 2.47 times more volatile than Sinclair Television Group. It trades about 0.26 of its potential returns per unit of risk. Sinclair Television Group is currently generating about -0.03 per unit of risk. If you would invest 4,573 in General Motors on August 26, 2024 and sell it today you would earn a total of 1,280 from holding General Motors or generate 27.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 56.82% |
| Values | Daily Returns |
General Motors vs. Sinclair Television Group
Performance |
| Timeline |
| General Motors |
| Sinclair Television |
GM and Sinclair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Sinclair
The main advantage of trading using opposite GM and Sinclair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Sinclair 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 Sinclair will offset losses from the drop in Sinclair's long position.The idea behind General Motors and Sinclair Television Group 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.| Sinclair vs. Planet Fitness | Sinclair vs. Sealed Air | Sinclair vs. Playtika Holding Corp | Sinclair vs. Hawkins |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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