Correlation Between GM and Mackenzie Canadian

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

Diversification Opportunities for GM and Mackenzie Canadian

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between GM and Mackenzie Canadian

If you would invest  3,842  in General Motors on September 4, 2022 and sell it today you would earn a total of  148.00  from holding General Motors or generate 3.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

General Motors  vs.  Mackenzie Canadian Large

 Performance (%) 
       Timeline  
General Motors 
GM Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively steady primary indicators, GM is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

GM Price Channel

Mackenzie Canadian Large 
Mackenzie Performance
0 of 100
Over the last 90 days Mackenzie Canadian Large has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Mackenzie Canadian is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

GM and Mackenzie Canadian Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GM and Mackenzie Canadian

The main advantage of trading using opposite GM and Mackenzie Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Mackenzie Canadian 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 Mackenzie Canadian will offset losses from the drop in Mackenzie Canadian's long position.
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The idea behind General Motors and Mackenzie Canadian Large 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.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Mackenzie Canadian as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Mackenzie Canadian's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Mackenzie Canadian's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Mackenzie Canadian Large.
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 Bond Directory module to find actively traded corporate debentures issued by US companies.

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