Correlation Between GM and CI Black
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By analyzing existing cross correlation between General Motors and CI Black Creek, you can compare the effects of market volatilities on GM and CI Black 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 CI Black. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and CI Black.
Diversification Opportunities for GM and CI Black
Good diversification
The 3 months correlation between GM and 0P0000752C is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and CI Black Creek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Black Creek 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 CI Black. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Black Creek has no effect on the direction of GM i.e., GM and CI Black go up and down completely randomly.
Pair Corralation between GM and CI Black
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.6 times more return on investment than CI Black. However, GM is 2.6 times more volatile than CI Black Creek. It trades about 0.05 of its potential returns per unit of risk. CI Black Creek is currently generating about 0.02 per unit of risk. If you would invest 3,807 in General Motors on August 26, 2024 and sell it today you would earn a total of 2,046 from holding General Motors or generate 53.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
General Motors vs. CI Black Creek
Performance |
| Timeline |
| General Motors |
| CI Black Creek |
GM and CI Black Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and CI Black
The main advantage of trading using opposite GM and CI Black positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, CI Black 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 CI Black will offset losses from the drop in CI Black's long position.The idea behind General Motors and CI Black Creek 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.| CI Black vs. Starlight Multi Family Core | CI Black vs. Fidelity Tactical High | CI Black vs. TD Comfort Aggressive | CI Black vs. TD Comfort Balanced |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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