Correlation Between GM and Cxj Group

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Can any of the company-specific risk be diversified away by investing in both GM and Cxj Group 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 Cxj Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Cxj Group Co, you can compare the effects of market volatilities on GM and Cxj Group 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 Cxj Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Cxj Group.

Diversification Opportunities for GM and Cxj Group

-0.79
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between GM and Cxj is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Cxj Group Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cxj Group 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 Cxj Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cxj Group has no effect on the direction of GM i.e., GM and Cxj Group go up and down completely randomly.

Pair Corralation between GM and Cxj Group

If you would invest  4,051  in General Motors on December 30, 2023 and sell it today you would earn a total of  484.00  from holding General Motors or generate 11.95% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

General Motors  vs.  Cxj Group Co

 Performance 
       Timeline  
General Motors 

Risk-Adjusted Performance

18 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 18 (%) 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.
Cxj Group 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Cxj Group Co has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively steady which may send shares a bit higher in April 2024. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

GM and Cxj Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GM and Cxj Group

The main advantage of trading using opposite GM and Cxj Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Cxj Group 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 Cxj Group will offset losses from the drop in Cxj Group's long position.
The idea behind General Motors and Cxj Group Co 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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