Correlation Between GM and Nonthavej Hospital

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Can any of the company-specific risk be diversified away by investing in both GM and Nonthavej Hospital 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 Nonthavej Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Nonthavej Hospital Public, you can compare the effects of market volatilities on GM and Nonthavej Hospital 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 Nonthavej Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Nonthavej Hospital.

Diversification Opportunities for GM and Nonthavej Hospital

0.11
  Correlation Coefficient

Average diversification

The 3 months correlation between GM and Nonthavej is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Nonthavej Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nonthavej Hospital Public 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 Nonthavej Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nonthavej Hospital Public has no effect on the direction of GM i.e., GM and Nonthavej Hospital go up and down completely randomly.

Pair Corralation between GM and Nonthavej Hospital

Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Nonthavej Hospital. In addition to that, GM is 1.9 times more volatile than Nonthavej Hospital Public. It trades about -0.09 of its total potential returns per unit of risk. Nonthavej Hospital Public is currently generating about -0.1 per unit of volatility. If you would invest  3,100  in Nonthavej Hospital Public on October 7, 2024 and sell it today you would lose (50.00) from holding Nonthavej Hospital Public or give up 1.61% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.0%
ValuesDaily Returns

General Motors  vs.  Nonthavej Hospital Public

 Performance 
       Timeline  
General Motors 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, GM displayed solid returns over the last few months and may actually be approaching a breakup point.
Nonthavej Hospital Public 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Nonthavej Hospital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Nonthavej Hospital is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

GM and Nonthavej Hospital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GM and Nonthavej Hospital

The main advantage of trading using opposite GM and Nonthavej Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Nonthavej Hospital 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 Nonthavej Hospital will offset losses from the drop in Nonthavej Hospital's long position.
The idea behind General Motors and Nonthavej Hospital Public 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.
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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