Correlation Between GM and Sinotrans
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By analyzing existing cross correlation between General Motors and Sinotrans Ltd Class, you can compare the effects of market volatilities on GM and Sinotrans 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 Sinotrans. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Sinotrans.
Diversification Opportunities for GM and Sinotrans
Weak diversification
The 3 months correlation between GM and Sinotrans is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Sinotrans Ltd Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinotrans Class 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 Sinotrans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinotrans Class has no effect on the direction of GM i.e., GM and Sinotrans go up and down completely randomly.
Pair Corralation between GM and Sinotrans
Allowing for the 90-day total investment horizon GM is expected to generate 1.35 times less return on investment than Sinotrans. In addition to that, GM is 1.08 times more volatile than Sinotrans Ltd Class. It trades about 0.06 of its total potential returns per unit of risk. Sinotrans Ltd Class is currently generating about 0.09 per unit of volatility. If you would invest 470.00 in Sinotrans Ltd Class on September 23, 2024 and sell it today you would earn a total of 53.00 from holding Sinotrans Ltd Class or generate 11.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 93.85% |
Values | Daily Returns |
General Motors vs. Sinotrans Ltd Class
Performance |
Timeline |
General Motors |
Sinotrans Class |
GM and Sinotrans Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GM and Sinotrans
The main advantage of trading using opposite GM and Sinotrans positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Sinotrans 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 Sinotrans will offset losses from the drop in Sinotrans' long position.The idea behind General Motors and Sinotrans Ltd Class 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.Sinotrans vs. Ming Yang Smart | Sinotrans vs. 159681 | Sinotrans vs. 159005 | Sinotrans vs. Loctek Ergonomic Technology |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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