Correlation Between GM and Church Crawford
Can any of the company-specific risk be diversified away by investing in both GM and Church Crawford 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 Church Crawford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Church Crawford, you can compare the effects of market volatilities on GM and Church Crawford 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 Church Crawford. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Church Crawford.
Diversification Opportunities for GM and Church Crawford
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and Church is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Church Crawford in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Church Crawford 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 Church Crawford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Church Crawford has no effect on the direction of GM i.e., GM and Church Crawford go up and down completely randomly.
Pair Corralation between GM and Church Crawford
Allowing for the 90-day total investment horizon GM is expected to generate 6.63 times less return on investment than Church Crawford. But when comparing it to its historical volatility, General Motors is 8.02 times less risky than Church Crawford. It trades about 0.07 of its potential returns per unit of risk. Church Crawford is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.52 in Church Crawford on September 2, 2024 and sell it today you would lose (0.29) from holding Church Crawford or give up 55.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
General Motors vs. Church Crawford
Performance |
| Timeline |
| General Motors |
| Church Crawford |
GM and Church Crawford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Church Crawford
The main advantage of trading using opposite GM and Church Crawford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Church Crawford 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 Church Crawford will offset losses from the drop in Church Crawford's long position.The idea behind General Motors and Church Crawford 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.| Church Crawford vs. Oncologix Tech | Church Crawford vs. JPX Global | Church Crawford vs. Profitable Develop | Church Crawford vs. Coastal Capital Acq |
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
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |