Correlation Between GM and Doosan Solus

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

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

Diversification Opportunities for GM and Doosan Solus

0.0

Correlation Coefficient

GM  Doosan Solus

Pay attention - limited upside

The 3 months correlation between GM and Doosan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Doosan Solus Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doosan Solus 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 Doosan Solus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doosan Solus has no effect on the direction of GM i.e., GM and Doosan Solus go up and down completely randomly.

Pair Corralation between GM and Doosan Solus

If you would invest (100.00) in Doosan Solus Co on December 20, 2024 and sell it today you would earn a total of  100.00  from holding Doosan Solus Co 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.  Doosan Solus Co

General Motors

Risk-Adjusted Performance

Very Weak

Over the last 90 days General Motors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, GM is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Doosan Solus

Risk-Adjusted Performance

Weak

Over the last 90 days Doosan Solus Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Doosan Solus is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GM and Doosan Solus

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

The idea behind General Motors and Doosan Solus 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.