Correlation Between GM and Columbia Capital
Can any of the company-specific risk be diversified away by investing in both GM and Columbia Capital 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 Capital 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 Capital Allocation, you can compare the effects of market volatilities on GM and Columbia Capital 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 Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Columbia Capital.
Diversification Opportunities for GM and Columbia Capital
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between GM and Columbia is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Columbia Capital Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Capital All 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 Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Capital All has no effect on the direction of GM i.e., GM and Columbia Capital go up and down completely randomly.
Pair Corralation between GM and Columbia Capital
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Columbia Capital. In addition to that, GM is 4.94 times more volatile than Columbia Capital Allocation. It trades about -0.34 of its total potential returns per unit of risk. Columbia Capital Allocation is currently generating about 0.04 per unit of volatility. If you would invest 1,191 in Columbia Capital Allocation on November 27, 2024 and sell it today you would earn a total of 4.00 from holding Columbia Capital Allocation or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Columbia Capital Allocation
Performance |
| Timeline |
| General Motors |
| Columbia Capital All |
GM and Columbia Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Columbia Capital
The main advantage of trading using opposite GM and Columbia Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Columbia Capital 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 Capital will offset losses from the drop in Columbia Capital's long position.The idea behind General Motors and Columbia Capital Allocation 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 Capital vs. Hsbc Funds | Columbia Capital vs. John Hancock Money | Columbia Capital vs. Aig Government Money | Columbia Capital vs. Transamerica Funds |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |