Correlation Between GM and Columbia Amt-free
Can any of the company-specific risk be diversified away by investing in both GM and Columbia Amt-free 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 Columbia Amt-free into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Columbia Amt Free Intermediate, you can compare the effects of market volatilities on GM and Columbia Amt-free 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 Columbia Amt-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Columbia Amt-free.
Diversification Opportunities for GM and Columbia Amt-free
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and Columbia is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Columbia Amt Free Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Amt Free 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 Columbia Amt-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Amt Free has no effect on the direction of GM i.e., GM and Columbia Amt-free go up and down completely randomly.
Pair Corralation between GM and Columbia Amt-free
Allowing for the 90-day total investment horizon General Motors is expected to generate 12.79 times more return on investment than Columbia Amt-free. However, GM is 12.79 times more volatile than Columbia Amt Free Intermediate. It trades about 0.04 of its potential returns per unit of risk. Columbia Amt Free Intermediate is currently generating about 0.08 per unit of risk. If you would invest 3,510 in General Motors on December 1, 2024 and sell it today you would earn a total of 1,403 from holding General Motors or generate 39.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
General Motors vs. Columbia Amt Free Intermediate
Performance |
| Timeline |
| General Motors |
| Columbia Amt Free |
GM and Columbia Amt-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Columbia Amt-free
The main advantage of trading using opposite GM and Columbia Amt-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Columbia Amt-free 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 Columbia Amt-free will offset losses from the drop in Columbia Amt-free's long position.The idea behind General Motors and Columbia Amt Free Intermediate 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.| Columbia Amt-free vs. Oklahoma College Savings | Columbia Amt-free vs. Small Pany Growth | Columbia Amt-free vs. Profunds Large Cap Growth | Columbia Amt-free vs. Touchstone Sands Capital |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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