Correlation Between GM and Sichuan Hebang
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By analyzing existing cross correlation between General Motors and Sichuan Hebang Biotechnology, you can compare the effects of market volatilities on GM and Sichuan Hebang 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 Sichuan Hebang. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Sichuan Hebang.
Diversification Opportunities for GM and Sichuan Hebang
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and Sichuan is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Sichuan Hebang Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Hebang Biote 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 Sichuan Hebang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Hebang Biote has no effect on the direction of GM i.e., GM and Sichuan Hebang go up and down completely randomly.
Pair Corralation between GM and Sichuan Hebang
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.2 times more return on investment than Sichuan Hebang. However, GM is 2.2 times more volatile than Sichuan Hebang Biotechnology. It trades about -0.06 of its potential returns per unit of risk. Sichuan Hebang Biotechnology is currently generating about -0.16 per unit of risk. If you would invest 5,352 in General Motors on December 29, 2024 and sell it today you would lose (632.00) from holding General Motors or give up 11.81% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.08% |
Values | Daily Returns |
General Motors vs. Sichuan Hebang Biotechnology
Performance |
Timeline |
General Motors |
Sichuan Hebang Biote |
GM and Sichuan Hebang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GM and Sichuan Hebang
The main advantage of trading using opposite GM and Sichuan Hebang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Sichuan Hebang 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 Sichuan Hebang will offset losses from the drop in Sichuan Hebang's long position.The idea behind General Motors and Sichuan Hebang Biotechnology 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.Sichuan Hebang vs. Guangzhou Shangpin Home | Sichuan Hebang vs. YLZ Information Tech | Sichuan Hebang vs. Northking Information Technology | Sichuan Hebang vs. Sublime China Information |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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