Correlation Between GM and Cullen International
Can any of the company-specific risk be diversified away by investing in both GM and Cullen International 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 Cullen International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Cullen International High, you can compare the effects of market volatilities on GM and Cullen International 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 Cullen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Cullen International.
Diversification Opportunities for GM and Cullen International
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GM and Cullen is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Cullen International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen International High 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 Cullen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen International High has no effect on the direction of GM i.e., GM and Cullen International go up and down completely randomly.
Pair Corralation between GM and Cullen International
Allowing for the 90-day total investment horizon General Motors is expected to generate 3.03 times more return on investment than Cullen International. However, GM is 3.03 times more volatile than Cullen International High. It trades about 0.05 of its potential returns per unit of risk. Cullen International High is currently generating about 0.06 per unit of risk. If you would invest 3,593 in General Motors on September 6, 2024 and sell it today you would earn a total of 1,743 from holding General Motors or generate 48.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 99.79% |
Values | Daily Returns |
General Motors vs. Cullen International High
Performance |
Timeline |
General Motors |
Cullen International High |
GM and Cullen International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GM and Cullen International
The main advantage of trading using opposite GM and Cullen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Cullen International 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 Cullen International will offset losses from the drop in Cullen International's long position.The idea behind General Motors and Cullen International High 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.Cullen International vs. Ab Global Real | Cullen International vs. Mirova Global Green | Cullen International vs. Artisan Global Unconstrained | Cullen International vs. 361 Global Longshort |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
CEOs Directory Screen CEOs from public companies around the world | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Stocks Directory Find actively traded stocks across global markets |