Correlation Between GM and ENBRIDGE
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By analyzing existing cross correlation between General Motors and ENBRIDGE INC 55, you can compare the effects of market volatilities on GM and ENBRIDGE 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 ENBRIDGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and ENBRIDGE.
Diversification Opportunities for GM and ENBRIDGE
Good diversification
The 3 months correlation between GM and ENBRIDGE is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and ENBRIDGE INC 55 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENBRIDGE INC 55 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 ENBRIDGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENBRIDGE INC 55 has no effect on the direction of GM i.e., GM and ENBRIDGE go up and down completely randomly.
Pair Corralation between GM and ENBRIDGE
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the ENBRIDGE. In addition to that, GM is 4.03 times more volatile than ENBRIDGE INC 55. It trades about -0.09 of its total potential returns per unit of risk. ENBRIDGE INC 55 is currently generating about 0.26 per unit of volatility. If you would invest 9,395 in ENBRIDGE INC 55 on November 9, 2024 and sell it today you would earn a total of 209.00 from holding ENBRIDGE INC 55 or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 60.0% |
| Values | Daily Returns |
General Motors vs. ENBRIDGE INC 55
Performance |
| Timeline |
| General Motors |
| ENBRIDGE INC 55 |
GM and ENBRIDGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and ENBRIDGE
The main advantage of trading using opposite GM and ENBRIDGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, ENBRIDGE 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 ENBRIDGE will offset losses from the drop in ENBRIDGE's long position.The idea behind General Motors and ENBRIDGE INC 55 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.| ENBRIDGE vs. Artisan Partners Asset | ENBRIDGE vs. Paysafe | ENBRIDGE vs. Alvotech | ENBRIDGE vs. Asure Software |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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