Correlation Between GM and ThaiDEX SET

Can any of the company-specific risk be diversified away by investing in both GM and ThaiDEX SET 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 ThaiDEX SET into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between General Motors and ThaiDEX SET High, you can compare the effects of market volatilities on GM and ThaiDEX SET 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 ThaiDEX SET. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and ThaiDEX SET.

Diversification Opportunities for GM and ThaiDEX SET

-0.54

Correlation Coefficient

GM  ThaiDEX SET

Excellent diversification

The 3 months correlation between GM and ThaiDEX is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and ThaiDEX SET High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ThaiDEX SET High 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 ThaiDEX SET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ThaiDEX SET High has no effect on the direction of GM i.e., GM and ThaiDEX SET go up and down completely randomly.

Pair Corralation between GM and ThaiDEX SET

Allowing for the 90-day total investment horizon General Motors is expected to under-perform the ThaiDEX SET. In addition to that, GM is 3.2 times more volatile than ThaiDEX SET High. It trades about -0.11 of its total potential returns per unit of risk. ThaiDEX SET High is currently generating about -0.23 per unit of volatility. If you would invest  1,079  in ThaiDEX SET High on September 22, 2024 and sell it today you would lose (44.00) from holding ThaiDEX SET High or give up 4.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

General Motors  vs.  ThaiDEX SET High

General Motors

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, GM may actually be approaching a critical reversion point that can send shares even higher in January 2025.

ThaiDEX SET High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ThaiDEX SET High has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Etf's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the ETF venture institutional investors.

Pair Trading with GM and ThaiDEX SET

The main advantage of trading using opposite GM and ThaiDEX SET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, ThaiDEX SET 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 ThaiDEX SET will offset losses from the drop in ThaiDEX SET's long position.

The idea behind General Motors and ThaiDEX SET High 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.

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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.