Correlation Between GM and Cortland Bancorp
Can any of the company-specific risk be diversified away by investing in both GM and Cortland Bancorp 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 Cortland Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Cortland Bancorp, you can compare the effects of market volatilities on GM and Cortland Bancorp 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 Cortland Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Cortland Bancorp.
Diversification Opportunities for GM and Cortland Bancorp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Cortland is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Cortland Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cortland Bancorp 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 Cortland Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cortland Bancorp has no effect on the direction of GM i.e., GM and Cortland Bancorp go up and down completely randomly.
Pair Corralation between GM and Cortland Bancorp
If you would invest 0.00 in Cortland Bancorp on January 21, 2024 and sell it today you would earn a total of 0.00 from holding Cortland Bancorp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
General Motors vs. Cortland Bancorp
Performance |
| Timeline |
| General Motors |
| Cortland Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Cortland Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Cortland Bancorp
The main advantage of trading using opposite GM and Cortland Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Cortland Bancorp 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 Cortland Bancorp will offset losses from the drop in Cortland Bancorp's long position.The idea behind General Motors and Cortland Bancorp 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.| Cortland Bancorp vs. Millennium Investment Acquisition | Cortland Bancorp vs. American Eagle Outfitters | Cortland Bancorp vs. Burlington Stores | Cortland Bancorp vs. Black Hills |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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