Correlation Between GM and Yangtze River
Can any of the company-specific risk be diversified away by investing in both GM and Yangtze River 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 Yangtze River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Yangtze River Port, you can compare the effects of market volatilities on GM and Yangtze River 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 Yangtze River. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Yangtze River.
Diversification Opportunities for GM and Yangtze River
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Yangtze is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Yangtze River Port in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yangtze River Port 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 Yangtze River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yangtze River Port has no effect on the direction of GM i.e., GM and Yangtze River go up and down completely randomly.
Pair Corralation between GM and Yangtze River
If you would invest (100.00) in Yangtze River Port on November 28, 2024 and sell it today you would earn a total of 100.00 from holding Yangtze River Port or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
General Motors vs. Yangtze River Port
Performance |
| Timeline |
| General Motors |
| Yangtze River Port |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
GM and Yangtze River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Yangtze River
The main advantage of trading using opposite GM and Yangtze River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Yangtze River 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 Yangtze River will offset losses from the drop in Yangtze River's long position.The idea behind General Motors and Yangtze River Port 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.| Yangtze River vs. Eco Depot | Yangtze River vs. Precipio | Yangtze River vs. Bio Path Holdings | Yangtze River vs. Akari Therapeutics PLC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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