Correlation Between GM and Edgepoint Cdn
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By analyzing existing cross correlation between General Motors and Edgepoint Cdn Growth, you can compare the effects of market volatilities on GM and Edgepoint Cdn 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 Edgepoint Cdn. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Edgepoint Cdn.
Diversification Opportunities for GM and Edgepoint Cdn
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Edgepoint is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Edgepoint Cdn Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgepoint Cdn Growth 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 Edgepoint Cdn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgepoint Cdn Growth has no effect on the direction of GM i.e., GM and Edgepoint Cdn go up and down completely randomly.
Pair Corralation between GM and Edgepoint Cdn
Allowing for the 90-day total investment horizon General Motors is expected to generate 4.22 times more return on investment than Edgepoint Cdn. However, GM is 4.22 times more volatile than Edgepoint Cdn Growth. It trades about 0.05 of its potential returns per unit of risk. Edgepoint Cdn Growth is currently generating about 0.09 per unit of risk. If you would invest 3,807 in General Motors on August 26, 2024 and sell it today you would earn a total of 2,046 from holding General Motors or generate 53.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.19% |
| Values | Daily Returns |
General Motors vs. Edgepoint Cdn Growth
Performance |
| Timeline |
| General Motors |
| Edgepoint Cdn Growth |
GM and Edgepoint Cdn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Edgepoint Cdn
The main advantage of trading using opposite GM and Edgepoint Cdn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Edgepoint Cdn 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 Edgepoint Cdn will offset losses from the drop in Edgepoint Cdn's long position.The idea behind General Motors and Edgepoint Cdn Growth 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.| Edgepoint Cdn vs. RBC Select Balanced | Edgepoint Cdn vs. RBC Portefeuille de | Edgepoint Cdn vs. TD Comfort Balanced | Edgepoint Cdn vs. RBC Global Equity |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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