Correlation Between GM and Desjardins Melodia
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By analyzing existing cross correlation between General Motors and Desjardins Melodia Balanced, you can compare the effects of market volatilities on GM and Desjardins Melodia 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 Desjardins Melodia. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Desjardins Melodia.
Diversification Opportunities for GM and Desjardins Melodia
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Desjardins is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Desjardins Melodia Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desjardins Melodia 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 Desjardins Melodia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Desjardins Melodia has no effect on the direction of GM i.e., GM and Desjardins Melodia go up and down completely randomly.
Pair Corralation between GM and Desjardins Melodia
Allowing for the 90-day total investment horizon General Motors is expected to generate 5.02 times more return on investment than Desjardins Melodia. However, GM is 5.02 times more volatile than Desjardins Melodia Balanced. It trades about 0.05 of its potential returns per unit of risk. Desjardins Melodia Balanced is currently generating about 0.09 per unit of risk. If you would invest 3,805 in General Motors on September 3, 2024 and sell it today you would earn a total of 1,754 from holding General Motors or generate 46.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
General Motors vs. Desjardins Melodia Balanced
Performance |
| Timeline |
| General Motors |
| Desjardins Melodia |
GM and Desjardins Melodia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Desjardins Melodia
The main advantage of trading using opposite GM and Desjardins Melodia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Desjardins Melodia 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 Desjardins Melodia will offset losses from the drop in Desjardins Melodia's long position.The idea behind General Motors and Desjardins Melodia Balanced 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.| Desjardins Melodia vs. RBC Select Balanced | Desjardins Melodia vs. TD Comfort Balanced | Desjardins Melodia vs. Mawer Balanced |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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