Correlation Between GM and Hainan Haiyao
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By analyzing existing cross correlation between General Motors and Hainan Haiyao Co, you can compare the effects of market volatilities on GM and Hainan Haiyao 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 Hainan Haiyao. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Hainan Haiyao.
Diversification Opportunities for GM and Hainan Haiyao
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Hainan is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Hainan Haiyao Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Haiyao 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 Hainan Haiyao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Haiyao has no effect on the direction of GM i.e., GM and Hainan Haiyao go up and down completely randomly.
Pair Corralation between GM and Hainan Haiyao
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.63 times more return on investment than Hainan Haiyao. However, General Motors is 1.58 times less risky than Hainan Haiyao. It trades about 0.05 of its potential returns per unit of risk. Hainan Haiyao Co is currently generating about -0.42 per unit of risk. If you would invest 5,271 in General Motors on October 8, 2024 and sell it today you would earn a total of 82.00 from holding General Motors or generate 1.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.0% |
Values | Daily Returns |
General Motors vs. Hainan Haiyao Co
Performance |
Timeline |
General Motors |
Hainan Haiyao |
GM and Hainan Haiyao Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GM and Hainan Haiyao
The main advantage of trading using opposite GM and Hainan Haiyao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Hainan Haiyao 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 Hainan Haiyao will offset losses from the drop in Hainan Haiyao's long position.The idea behind General Motors and Hainan Haiyao Co 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.Hainan Haiyao vs. Fiberhome Telecommunication Technologies | Hainan Haiyao vs. Runjian Communication Co | Hainan Haiyao vs. Guocheng Mining Co | Hainan Haiyao vs. Hangzhou Arcvideo Technology |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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