Correlation Between Geely Automobile and Eastinco Mining
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Eastinco Mining 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 Geely Automobile and Eastinco Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geely Automobile Holdings and Eastinco Mining Exploration, you can compare the effects of market volatilities on Geely Automobile and Eastinco Mining 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 Geely Automobile with a short position of Eastinco Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Eastinco Mining.
Diversification Opportunities for Geely Automobile and Eastinco Mining
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Geely and Eastinco is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Eastinco Mining Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastinco Mining Expl and Geely Automobile 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 Geely Automobile Holdings are associated (or correlated) with Eastinco Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastinco Mining Expl has no effect on the direction of Geely Automobile i.e., Geely Automobile and Eastinco Mining go up and down completely randomly.
Pair Corralation between Geely Automobile and Eastinco Mining
Assuming the 90 days trading horizon Geely Automobile is expected to generate 15.43 times less return on investment than Eastinco Mining. In addition to that, Geely Automobile is 1.18 times more volatile than Eastinco Mining Exploration. It trades about 0.02 of its total potential returns per unit of risk. Eastinco Mining Exploration is currently generating about 0.29 per unit of volatility. If you would invest 4,650 in Eastinco Mining Exploration on October 30, 2024 and sell it today you would earn a total of 750.00 from holding Eastinco Mining Exploration or generate 16.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Eastinco Mining Exploration
Performance |
| Timeline |
| Geely Automobile Holdings |
| Eastinco Mining Expl |
Geely Automobile and Eastinco Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Eastinco Mining
The main advantage of trading using opposite Geely Automobile and Eastinco Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Eastinco Mining 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 Eastinco Mining will offset losses from the drop in Eastinco Mining's long position.| Geely Automobile vs. Dairy Farm International | Geely Automobile vs. GlobalData PLC | Geely Automobile vs. Batm Advanced Communications | Geely Automobile vs. Take Two Interactive Software |
| Eastinco Mining vs. Hollywood Bowl Group | Eastinco Mining vs. Molson Coors Beverage | Eastinco Mining vs. Zinc Media Group | Eastinco Mining vs. Ebro Foods |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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