Correlation Between GM and Voya Cbre
Can any of the company-specific risk be diversified away by investing in both GM and Voya Cbre 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 Voya Cbre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Voya Cbre Global, you can compare the effects of market volatilities on GM and Voya Cbre 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 Voya Cbre. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Voya Cbre.
Diversification Opportunities for GM and Voya Cbre
Significant diversification
The 3 months correlation between GM and Voya is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Voya Cbre Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Cbre Global 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 Voya Cbre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Cbre Global has no effect on the direction of GM i.e., GM and Voya Cbre go up and down completely randomly.
Pair Corralation between GM and Voya Cbre
Allowing for the 90-day total investment horizon General Motors is expected to generate 3.67 times more return on investment than Voya Cbre. However, GM is 3.67 times more volatile than Voya Cbre Global. It trades about 0.08 of its potential returns per unit of risk. Voya Cbre Global is currently generating about 0.14 per unit of risk. If you would invest 4,551 in General Motors on September 1, 2024 and sell it today you would earn a total of 1,008 from holding General Motors or generate 22.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
General Motors vs. Voya Cbre Global
Performance |
| Timeline |
| General Motors |
| Voya Cbre Global |
GM and Voya Cbre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Voya Cbre
The main advantage of trading using opposite GM and Voya Cbre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Voya Cbre 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 Voya Cbre will offset losses from the drop in Voya Cbre's long position.The idea behind General Motors and Voya Cbre Global 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.| Voya Cbre vs. John Hancock Enduring | Voya Cbre vs. Invesco Global Infrastructure | Voya Cbre vs. Mainstay Income Builder | Voya Cbre vs. Cohen Steers Global |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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