Correlation Between GM and Park Ha

Can any of the company-specific risk be diversified away by investing in both GM and Park Ha 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 Park Ha into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between General Motors and Park Ha Biological, you can compare the effects of market volatilities on GM and Park Ha 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 Park Ha. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Park Ha.

Diversification Opportunities for GM and Park Ha

-0.45

Correlation Coefficient

GM  Park Ha

Very good diversification

The 3 months correlation between GM and Park is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Park Ha Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Ha Biological 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 Park Ha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Ha Biological has no effect on the direction of GM i.e., GM and Park Ha go up and down completely randomly.

Pair Corralation between GM and Park Ha

Allowing for the 90-day total investment horizon GM is expected to generate 7.56 times less return on investment than Park Ha. But when comparing it to its historical volatility, General Motors is 5.08 times less risky than Park Ha. It trades about 0.03 of its potential returns per unit of risk. Park Ha Biological is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  407.00  in Park Ha Biological on May 7, 2025 and sell it today you would lose (330.00) from holding Park Ha Biological or give up 81.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	66.52%
Values	Daily Returns

General Motors  vs.  Park Ha Biological

General Motors

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile primary indicators, GM displayed solid returns over the last few months and may actually be approaching a breakup point.

Park Ha Biological

Risk-Adjusted Performance

Weakest

Over the last 90 days Park Ha Biological has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in September 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with GM and Park Ha

The main advantage of trading using opposite GM and Park Ha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Park Ha 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 Park Ha will offset losses from the drop in Park Ha's long position.

The idea behind General Motors and Park Ha Biological 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.

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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.