Correlation Between GM and CHLRBS CT

Can any of the company-specific risk be diversified away by investing in both GM and CHLRBS CT 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 CHLRBS CT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between General Motors and CHLRBS CT, you can compare the effects of market volatilities on GM and CHLRBS CT 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 CHLRBS CT. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and CHLRBS CT.

Diversification Opportunities for GM and CHLRBS CT

0.0

Correlation Coefficient

GM  CHLRBS CT

Pay attention - limited upside

The 3 months correlation between GM and CHLRBS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and CHLRBS CT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHLRBS CT 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 CHLRBS CT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHLRBS CT has no effect on the direction of GM i.e., GM and CHLRBS CT go up and down completely randomly.

Pair Corralation between GM and CHLRBS CT

If you would invest  4,676  in General Motors on September 15, 2024 and sell it today you would earn a total of  577.00  from holding General Motors or generate 12.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

General Motors  vs.  CHLRBS CT

General Motors

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, GM displayed solid returns over the last few months and may actually be approaching a breakup point.

CHLRBS CT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHLRBS CT has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, CHLRBS CT is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with GM and CHLRBS CT

The main advantage of trading using opposite GM and CHLRBS CT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, CHLRBS CT 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 CHLRBS CT will offset losses from the drop in CHLRBS CT's long position.

The idea behind General Motors and CHLRBS CT 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.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.