Correlation Between GM and MainStay CBRE
Can any of the company-specific risk be diversified away by investing in both GM and MainStay CBRE 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 MainStay CBRE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and MainStay CBRE Global, you can compare the effects of market volatilities on GM and MainStay CBRE 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 MainStay CBRE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and MainStay CBRE.
Diversification Opportunities for GM and MainStay CBRE
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and MainStay is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and MainStay CBRE Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MainStay CBRE Global 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 MainStay CBRE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MainStay CBRE Global has no effect on the direction of GM i.e., GM and MainStay CBRE go up and down completely randomly.
Pair Corralation between GM and MainStay CBRE
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the MainStay CBRE. In addition to that, GM is 3.23 times more volatile than MainStay CBRE Global. It trades about -0.34 of its total potential returns per unit of risk. MainStay CBRE Global is currently generating about 0.13 per unit of volatility. If you would invest 1,228 in MainStay CBRE Global on November 27, 2024 and sell it today you would earn a total of 23.00 from holding MainStay CBRE Global or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. MainStay CBRE Global
Performance |
| Timeline |
| General Motors |
| MainStay CBRE Global |
GM and MainStay CBRE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and MainStay CBRE
The main advantage of trading using opposite GM and MainStay CBRE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, MainStay CBRE 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 MainStay CBRE will offset losses from the drop in MainStay CBRE's long position.The idea behind General Motors and MainStay CBRE Global 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.| MainStay CBRE vs. Ares Dynamic Credit | MainStay CBRE vs. Blackrock Muniholdings Closed | MainStay CBRE vs. Blackrock Munivest | MainStay CBRE vs. Blackrock Muniyield Quality |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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