Correlation Between Compagnie Gnrale and American Axle
Can any of the company-specific risk be diversified away by investing in both Compagnie Gnrale and American Axle 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 Compagnie Gnrale and American Axle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Gnrale des and American Axle Manufacturing, you can compare the effects of market volatilities on Compagnie Gnrale and American Axle 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 Compagnie Gnrale with a short position of American Axle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Gnrale and American Axle.
Diversification Opportunities for Compagnie Gnrale and American Axle
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Compagnie and American is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Gnrale des and American Axle Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Axle Manufa and Compagnie Gnrale 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 Compagnie Gnrale des are associated (or correlated) with American Axle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Axle Manufa has no effect on the direction of Compagnie Gnrale i.e., Compagnie Gnrale and American Axle go up and down completely randomly.
Pair Corralation between Compagnie Gnrale and American Axle
Assuming the 90 days horizon Compagnie Gnrale des is expected to generate 1.7 times more return on investment than American Axle. However, Compagnie Gnrale is 1.7 times more volatile than American Axle Manufacturing. It trades about 0.18 of its potential returns per unit of risk. American Axle Manufacturing is currently generating about 0.07 per unit of risk. If you would invest 3,201 in Compagnie Gnrale des on October 23, 2024 and sell it today you would earn a total of 394.00 from holding Compagnie Gnrale des or generate 12.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Compagnie Gnrale des vs. American Axle Manufacturing
Performance |
| Timeline |
| Compagnie Gnrale des |
| American Axle Manufa |
Compagnie Gnrale and American Axle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Gnrale and American Axle
The main advantage of trading using opposite Compagnie Gnrale and American Axle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Gnrale position performs unexpectedly, American Axle 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 American Axle will offset losses from the drop in American Axle's long position.| Compagnie Gnrale vs. Bridgestone Corp ADR | Compagnie Gnrale vs. Continental Aktiengesellschaft | Compagnie Gnrale vs. Douglas Dynamics | Compagnie Gnrale vs. Compagnie Generale des |
| American Axle vs. Lear Corporation | American Axle vs. Commercial Vehicle Group | American Axle vs. Adient PLC | American Axle vs. Gentex |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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