Correlation Between GM and Robinson Opportunistic
Can any of the company-specific risk be diversified away by investing in both GM and Robinson Opportunistic 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 Robinson Opportunistic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Robinson Opportunistic Income, you can compare the effects of market volatilities on GM and Robinson Opportunistic 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 Robinson Opportunistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Robinson Opportunistic.
Diversification Opportunities for GM and Robinson Opportunistic
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GM and Robinson is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Robinson Opportunistic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robinson Opportunistic 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 Robinson Opportunistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robinson Opportunistic has no effect on the direction of GM i.e., GM and Robinson Opportunistic go up and down completely randomly.
Pair Corralation between GM and Robinson Opportunistic
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Robinson Opportunistic. In addition to that, GM is 7.76 times more volatile than Robinson Opportunistic Income. It trades about -0.12 of its total potential returns per unit of risk. Robinson Opportunistic Income is currently generating about 0.34 per unit of volatility. If you would invest 1,054 in Robinson Opportunistic Income on November 8, 2024 and sell it today you would earn a total of 26.00 from holding Robinson Opportunistic Income or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
General Motors vs. Robinson Opportunistic Income
Performance |
| Timeline |
| General Motors |
| Robinson Opportunistic |
GM and Robinson Opportunistic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Robinson Opportunistic
The main advantage of trading using opposite GM and Robinson Opportunistic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Robinson Opportunistic 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 Robinson Opportunistic will offset losses from the drop in Robinson Opportunistic's long position.The idea behind General Motors and Robinson Opportunistic Income 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.| Robinson Opportunistic vs. T Rowe Price | Robinson Opportunistic vs. Aqr Risk Parity | Robinson Opportunistic vs. Goldman Sachs High | Robinson Opportunistic vs. Ab High Income |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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