Correlation Between GM and Wankai New
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By analyzing existing cross correlation between General Motors and Wankai New Materials, you can compare the effects of market volatilities on GM and Wankai New 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 Wankai New. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Wankai New.
Diversification Opportunities for GM and Wankai New
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and Wankai is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Wankai New Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wankai New Materials 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 Wankai New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wankai New Materials has no effect on the direction of GM i.e., GM and Wankai New go up and down completely randomly.
Pair Corralation between GM and Wankai New
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Wankai New. In addition to that, GM is 1.96 times more volatile than Wankai New Materials. It trades about -0.31 of its total potential returns per unit of risk. Wankai New Materials is currently generating about -0.09 per unit of volatility. If you would invest 1,099 in Wankai New Materials on September 24, 2024 and sell it today you would lose (26.00) from holding Wankai New Materials or give up 2.37% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.24% |
Values | Daily Returns |
General Motors vs. Wankai New Materials
Performance |
Timeline |
General Motors |
Wankai New Materials |
GM and Wankai New Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GM and Wankai New
The main advantage of trading using opposite GM and Wankai New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Wankai New 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 Wankai New will offset losses from the drop in Wankai New's long position.The idea behind General Motors and Wankai New Materials 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.Wankai New vs. Tonghua Grape Wine | Wankai New vs. Jiangxi Naipu Mining | Wankai New vs. BTG Hotels Group | Wankai New vs. Shandong Longquan Pipeline |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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