Correlation Between Geely Automobile and Cornish Metals
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Cornish Metals 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 Cornish Metals 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 Cornish Metals, you can compare the effects of market volatilities on Geely Automobile and Cornish Metals 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 Cornish Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Cornish Metals.
Diversification Opportunities for Geely Automobile and Cornish Metals
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Geely and Cornish is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Cornish Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornish Metals 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 Cornish Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornish Metals has no effect on the direction of Geely Automobile i.e., Geely Automobile and Cornish Metals go up and down completely randomly.
Pair Corralation between Geely Automobile and Cornish Metals
Assuming the 90 days trading horizon Geely Automobile is expected to generate 6.65 times less return on investment than Cornish Metals. In addition to that, Geely Automobile is 1.7 times more volatile than Cornish Metals. It trades about 0.01 of its total potential returns per unit of risk. Cornish Metals is currently generating about 0.17 per unit of volatility. If you would invest 875.00 in Cornish Metals on October 20, 2024 and sell it today you would earn a total of 50.00 from holding Cornish Metals or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Cornish Metals
Performance |
| Timeline |
| Geely Automobile Holdings |
| Cornish Metals |
Geely Automobile and Cornish Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Cornish Metals
The main advantage of trading using opposite Geely Automobile and Cornish Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Cornish Metals 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 Cornish Metals will offset losses from the drop in Cornish Metals' long position.| Geely Automobile vs. Solstad Offshore ASA | Geely Automobile vs. Young Cos Brewery | Geely Automobile vs. Verizon Communications | Geely Automobile vs. Gamma Communications PLC |
| Cornish Metals vs. Worldwide Healthcare Trust | Cornish Metals vs. JPMorgan Japanese Investment | Cornish Metals vs. Lindsell Train Investment | Cornish Metals vs. Spire Healthcare Group |
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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