Correlation Between GM and UOBSP
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By analyzing existing cross correlation between General Motors and UOBSP 3863 07 OCT 32, you can compare the effects of market volatilities on GM and UOBSP 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 UOBSP. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and UOBSP.
Diversification Opportunities for GM and UOBSP
Poor diversification
The 3 months correlation between GM and UOBSP is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and UOBSP 3863 07 OCT 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UOBSP 3863 07 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 UOBSP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UOBSP 3863 07 has no effect on the direction of GM i.e., GM and UOBSP go up and down completely randomly.
Pair Corralation between GM and UOBSP
Allowing for the 90-day total investment horizon General Motors is expected to generate 3.87 times more return on investment than UOBSP. However, GM is 3.87 times more volatile than UOBSP 3863 07 OCT 32. It trades about 0.08 of its potential returns per unit of risk. UOBSP 3863 07 OCT 32 is currently generating about 0.14 per unit of risk. If you would invest 3,275 in General Motors on September 12, 2024 and sell it today you would earn a total of 1,999 from holding General Motors or generate 61.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 18.43% |
| Values | Daily Returns |
General Motors vs. UOBSP 3863 07 OCT 32
Performance |
| Timeline |
| General Motors |
| UOBSP 3863 07 |
GM and UOBSP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and UOBSP
The main advantage of trading using opposite GM and UOBSP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, UOBSP 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 UOBSP will offset losses from the drop in UOBSP's long position.The idea behind General Motors and UOBSP 3863 07 OCT 32 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.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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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