Correlation Between ZhongAn Online and GEELY AUTOMOBILE
Can any of the company-specific risk be diversified away by investing in both ZhongAn Online and GEELY AUTOMOBILE 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 ZhongAn Online and GEELY AUTOMOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZhongAn Online P and GEELY AUTOMOBILE, you can compare the effects of market volatilities on ZhongAn Online and GEELY AUTOMOBILE 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 ZhongAn Online with a short position of GEELY AUTOMOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZhongAn Online and GEELY AUTOMOBILE.
Diversification Opportunities for ZhongAn Online and GEELY AUTOMOBILE
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between ZhongAn and GEELY is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding ZhongAn Online P and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE and ZhongAn Online 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 ZhongAn Online P are associated (or correlated) with GEELY AUTOMOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEELY AUTOMOBILE has no effect on the direction of ZhongAn Online i.e., ZhongAn Online and GEELY AUTOMOBILE go up and down completely randomly.
Pair Corralation between ZhongAn Online and GEELY AUTOMOBILE
Assuming the 90 days trading horizon ZhongAn Online P is expected to under-perform the GEELY AUTOMOBILE. In addition to that, ZhongAn Online is 1.28 times more volatile than GEELY AUTOMOBILE. It trades about -0.03 of its total potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about 0.03 per unit of volatility. If you would invest 176.00 in GEELY AUTOMOBILE on November 3, 2024 and sell it today you would earn a total of 3.00 from holding GEELY AUTOMOBILE or generate 1.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZhongAn Online P vs. GEELY AUTOMOBILE
Performance |
| Timeline |
| ZhongAn Online P |
| GEELY AUTOMOBILE |
ZhongAn Online and GEELY AUTOMOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZhongAn Online and GEELY AUTOMOBILE
The main advantage of trading using opposite ZhongAn Online and GEELY AUTOMOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZhongAn Online position performs unexpectedly, GEELY AUTOMOBILE 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 GEELY AUTOMOBILE will offset losses from the drop in GEELY AUTOMOBILE's long position.| ZhongAn Online vs. SENECA FOODS A | ZhongAn Online vs. Casio Computer CoLtd | ZhongAn Online vs. GMO Internet | ZhongAn Online vs. Verizon Communications |
| GEELY AUTOMOBILE vs. Daido Steel Co | GEELY AUTOMOBILE vs. Delta Electronics Public | GEELY AUTOMOBILE vs. COSMOSTEEL HLDGS | GEELY AUTOMOBILE vs. Samsung Electronics Co |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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