Correlation Between GM and Mackenzie Global
Can any of the company-specific risk be diversified away by investing in both GM and Mackenzie Global 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 Mackenzie Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Mackenzie Global Infrastructure, you can compare the effects of market volatilities on GM and Mackenzie 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 Mackenzie Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Mackenzie Global.
Diversification Opportunities for GM and Mackenzie Global
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Mackenzie is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Mackenzie Global Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Global Inf 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 Mackenzie Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Global Inf has no effect on the direction of GM i.e., GM and Mackenzie Global go up and down completely randomly.
Pair Corralation between GM and Mackenzie Global
Allowing for the 90-day total investment horizon General Motors is expected to generate 3.48 times more return on investment than Mackenzie Global. However, GM is 3.48 times more volatile than Mackenzie Global Infrastructure. It trades about 0.17 of its potential returns per unit of risk. Mackenzie Global Infrastructure is currently generating about 0.24 per unit of risk. If you would invest 5,076 in General Motors on September 1, 2024 and sell it today you would earn a total of 483.00 from holding General Motors or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
General Motors vs. Mackenzie Global Infrastructur
Performance |
| Timeline |
| General Motors |
| Mackenzie Global Inf |
GM and Mackenzie Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Mackenzie Global
The main advantage of trading using opposite GM and Mackenzie Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Mackenzie 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 Mackenzie Global will offset losses from the drop in Mackenzie Global's long position.The idea behind General Motors and Mackenzie Global Infrastructure 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.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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |