Correlation Between GM and Marshall Machines
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By analyzing existing cross correlation between General Motors and Marshall Machines Limited, you can compare the effects of market volatilities on GM and Marshall Machines 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 Marshall Machines. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Marshall Machines.
Diversification Opportunities for GM and Marshall Machines
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and Marshall is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Marshall Machines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marshall Machines 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 Marshall Machines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marshall Machines has no effect on the direction of GM i.e., GM and Marshall Machines go up and down completely randomly.
Pair Corralation between GM and Marshall Machines
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.76 times more return on investment than Marshall Machines. However, General Motors is 1.31 times less risky than Marshall Machines. It trades about -0.07 of its potential returns per unit of risk. Marshall Machines Limited is currently generating about -0.38 per unit of risk. If you would invest 4,808 in General Motors on January 9, 2025 and sell it today you would lose (234.00) from holding General Motors or give up 4.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
General Motors vs. Marshall Machines Limited
Performance |
| Timeline |
| General Motors |
| Marshall Machines |
GM and Marshall Machines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Marshall Machines
The main advantage of trading using opposite GM and Marshall Machines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Marshall Machines 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 Marshall Machines will offset losses from the drop in Marshall Machines' long position.The idea behind General Motors and Marshall Machines Limited 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.| Marshall Machines vs. V2 Retail Limited | Marshall Machines vs. Future Retail Limited | Marshall Machines vs. Hindustan Media Ventures | Marshall Machines vs. Yatra Online Limited |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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