Correlation Between GM and Kandi Technologies

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both GM and Kandi Technologies 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 Kandi Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Kandi Technologies Group, you can compare the effects of market volatilities on GM and Kandi Technologies 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 Kandi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Kandi Technologies.

Diversification Opportunities for GM and Kandi Technologies

-0.84
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between GM and Kandi is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Kandi Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandi Technologies 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 Kandi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kandi Technologies has no effect on the direction of GM i.e., GM and Kandi Technologies go up and down completely randomly.

Pair Corralation between GM and Kandi Technologies

Allowing for the 90-day total investment horizon General Motors is expected to generate 0.85 times more return on investment than Kandi Technologies. However, General Motors is 1.18 times less risky than Kandi Technologies. It trades about 0.03 of its potential returns per unit of risk. Kandi Technologies Group is currently generating about -0.01 per unit of risk. If you would invest  3,864  in General Motors on December 29, 2023 and sell it today you would earn a total of  671.00  from holding General Motors or generate 17.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

General Motors  vs.  Kandi Technologies Group

 Performance 
       Timeline  
General Motors 

Risk-Adjusted Performance

18 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 18 (%) 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.
Kandi Technologies 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Kandi Technologies Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in April 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

GM and Kandi Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GM and Kandi Technologies

The main advantage of trading using opposite GM and Kandi Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Kandi Technologies 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 Kandi Technologies will offset losses from the drop in Kandi Technologies' long position.
The idea behind General Motors and Kandi Technologies Group 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

Other Complementary Tools

Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Money Managers
Screen money managers from public funds and ETFs managed around the world
Equity Valuation
Check real value of public entities based on technical and fundamental data
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Stocks Directory
Find actively traded stocks across global markets
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios