Correlation Between GM and Atelierele CFR
Can any of the company-specific risk be diversified away by investing in both GM and Atelierele CFR 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 Atelierele CFR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Atelierele CFR Grivita, you can compare the effects of market volatilities on GM and Atelierele CFR 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 Atelierele CFR. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Atelierele CFR.
Diversification Opportunities for GM and Atelierele CFR
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and Atelierele is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Atelierele CFR Grivita in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atelierele CFR Grivita 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 Atelierele CFR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atelierele CFR Grivita has no effect on the direction of GM i.e., GM and Atelierele CFR go up and down completely randomly.
Pair Corralation between GM and Atelierele CFR
Allowing for the 90-day total investment horizon GM is expected to generate 2.59 times less return on investment than Atelierele CFR. But when comparing it to its historical volatility, General Motors is 1.94 times less risky than Atelierele CFR. It trades about 0.05 of its potential returns per unit of risk. Atelierele CFR Grivita is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,500 in Atelierele CFR Grivita on August 26, 2024 and sell it today you would earn a total of 2,420 from holding Atelierele CFR Grivita or generate 96.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 67.81% |
| Values | Daily Returns |
General Motors vs. Atelierele CFR Grivita
Performance |
| Timeline |
| General Motors |
| Atelierele CFR Grivita |
GM and Atelierele CFR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Atelierele CFR
The main advantage of trading using opposite GM and Atelierele CFR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Atelierele CFR 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 Atelierele CFR will offset losses from the drop in Atelierele CFR's long position.The idea behind General Motors and Atelierele CFR Grivita 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.| Atelierele CFR vs. Digi Communications NV | Atelierele CFR vs. GRUPUL INDUSTRIAL ELECTROCONTACT | Atelierele CFR vs. Safetech Innovations SA | Atelierele CFR vs. Compania Hoteliera InterContinental |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |