Correlation Between GM and HMTNew Technical
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By analyzing existing cross correlation between General Motors and HMTNew Technical, you can compare the effects of market volatilities on GM and HMTNew Technical 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 HMTNew Technical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and HMTNew Technical.
Diversification Opportunities for GM and HMTNew Technical
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GM and HMTNew is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and HMTNew Technical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMTNew Technical 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 HMTNew Technical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HMTNew Technical has no effect on the direction of GM i.e., GM and HMTNew Technical go up and down completely randomly.
Pair Corralation between GM and HMTNew Technical
Allowing for the 90-day total investment horizon GM is expected to generate 3.11 times less return on investment than HMTNew Technical. But when comparing it to its historical volatility, General Motors is 1.69 times less risky than HMTNew Technical. It trades about 0.07 of its potential returns per unit of risk. HMTNew Technical is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,954 in HMTNew Technical on September 5, 2024 and sell it today you would earn a total of 1,207 from holding HMTNew Technical or generate 61.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 96.8% |
Values | Daily Returns |
General Motors vs. HMTNew Technical
Performance |
Timeline |
General Motors |
HMTNew Technical |
GM and HMTNew Technical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GM and HMTNew Technical
The main advantage of trading using opposite GM and HMTNew Technical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, HMTNew Technical 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 HMTNew Technical will offset losses from the drop in HMTNew Technical's long position.The idea behind General Motors and HMTNew Technical 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.HMTNew Technical vs. Jointo Energy Investment | HMTNew Technical vs. Changchun UP Optotech | HMTNew Technical vs. Sinofibers Technology Co | HMTNew Technical vs. Nuode Investment Co |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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