Correlation Between GM and Corbion NV
Can any of the company-specific risk be diversified away by investing in both GM and Corbion NV 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 Corbion NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Corbion NV, you can compare the effects of market volatilities on GM and Corbion NV 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 Corbion NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Corbion NV.
Diversification Opportunities for GM and Corbion NV
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Corbion is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Corbion NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corbion NV 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 Corbion NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corbion NV has no effect on the direction of GM i.e., GM and Corbion NV go up and down completely randomly.
Pair Corralation between GM and Corbion NV
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.54 times more return on investment than Corbion NV. However, GM is 1.54 times more volatile than Corbion NV. It trades about 0.1 of its potential returns per unit of risk. Corbion NV is currently generating about -0.03 per unit of risk. If you would invest 4,829 in General Motors on September 2, 2024 and sell it today you would earn a total of 730.00 from holding General Motors or generate 15.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.97% |
| Values | Daily Returns |
General Motors vs. Corbion NV
Performance |
| Timeline |
| General Motors |
| Corbion NV |
GM and Corbion NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Corbion NV
The main advantage of trading using opposite GM and Corbion NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Corbion NV 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 Corbion NV will offset losses from the drop in Corbion NV's long position.The idea behind General Motors and Corbion NV 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.| Corbion NV vs. Flow Traders BV | Corbion NV vs. Aalberts Industries NV | Corbion NV vs. ForFarmers NV | Corbion NV vs. TKH Group NV |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |