Correlation Between GM and Loctek Ergonomic
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By analyzing existing cross correlation between General Motors and Loctek Ergonomic Technology, you can compare the effects of market volatilities on GM and Loctek Ergonomic 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 Loctek Ergonomic. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Loctek Ergonomic.
Diversification Opportunities for GM and Loctek Ergonomic
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and Loctek is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Loctek Ergonomic Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loctek Ergonomic Tec 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 Loctek Ergonomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loctek Ergonomic Tec has no effect on the direction of GM i.e., GM and Loctek Ergonomic go up and down completely randomly.
Pair Corralation between GM and Loctek Ergonomic
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Loctek Ergonomic. But the stock apears to be less risky and, when comparing its historical volatility, General Motors is 1.04 times less risky than Loctek Ergonomic. The stock trades about -0.07 of its potential returns per unit of risk. The Loctek Ergonomic Technology is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,793 in Loctek Ergonomic Technology on December 2, 2024 and sell it today you would lose (167.00) from holding Loctek Ergonomic Technology or give up 9.31% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 96.72% |
Values | Daily Returns |
General Motors vs. Loctek Ergonomic Technology
Performance |
Timeline |
General Motors |
Loctek Ergonomic Tec |
GM and Loctek Ergonomic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GM and Loctek Ergonomic
The main advantage of trading using opposite GM and Loctek Ergonomic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Loctek Ergonomic 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 Loctek Ergonomic will offset losses from the drop in Loctek Ergonomic's long position.The idea behind General Motors and Loctek Ergonomic Technology 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.Loctek Ergonomic vs. Changzhou Evergreen Technology | Loctek Ergonomic vs. Guangzhou Dongfang Hotel | Loctek Ergonomic vs. Huatian Hotel Group | Loctek Ergonomic vs. Ningbo Bohui Chemical |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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