Correlation Between GM and RBC Global
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By analyzing existing cross correlation between General Motors and RBC Global Technology, you can compare the effects of market volatilities on GM and RBC Global 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 RBC Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and RBC Global.
Diversification Opportunities for GM and RBC Global
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GM and RBC is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and RBC Global Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Global Technology 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 RBC Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Global Technology has no effect on the direction of GM i.e., GM and RBC Global go up and down completely randomly.
Pair Corralation between GM and RBC Global
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.79 times more return on investment than RBC Global. However, GM is 1.79 times more volatile than RBC Global Technology. It trades about 0.09 of its potential returns per unit of risk. RBC Global Technology is currently generating about 0.1 per unit of risk. If you would invest 4,476 in General Motors on August 29, 2024 and sell it today you would earn a total of 1,074 from holding General Motors or generate 23.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
General Motors vs. RBC Global Technology
Performance |
| Timeline |
| General Motors |
| RBC Global Technology |
GM and RBC Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and RBC Global
The main advantage of trading using opposite GM and RBC Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, RBC Global 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 RBC Global will offset losses from the drop in RBC Global's long position.The idea behind General Motors and RBC Global Technology 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.| RBC Global vs. CI Signature Cat | RBC Global vs. CI Global Alpha | RBC Global vs. Fidelity Technology Innovators | RBC Global vs. CI Global Health |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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