Correlation Between Carbios and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both Carbios 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 Carbios and Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carbios and Geely Automobile Holdings, you can compare the effects of market volatilities on Carbios 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 Carbios with a short position of Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carbios and Geely Automobile.
Diversification Opportunities for Carbios and Geely Automobile
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Carbios and Geely is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Carbios and Geely Automobile Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geely Automobile Holdings and Carbios 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 Carbios 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 Holdings has no effect on the direction of Carbios i.e., Carbios and Geely Automobile go up and down completely randomly.
Pair Corralation between Carbios and Geely Automobile
Assuming the 90 days horizon Carbios is expected to under-perform the Geely Automobile. In addition to that, Carbios is 2.19 times more volatile than Geely Automobile Holdings. It trades about -0.02 of its total potential returns per unit of risk. Geely Automobile Holdings is currently generating about 0.17 per unit of volatility. If you would invest 151.00 in Geely Automobile Holdings on September 13, 2024 and sell it today you would earn a total of 40.00 from holding Geely Automobile Holdings or generate 26.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Carbios vs. Geely Automobile Holdings
Performance |
| Timeline |
| Carbios |
| Geely Automobile Holdings |
Carbios and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carbios and Geely Automobile
The main advantage of trading using opposite Carbios and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carbios 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.| Carbios vs. Geely Automobile Holdings | Carbios vs. National Beverage Corp | Carbios vs. Motorcar Parts of | Carbios vs. Lery Seafood Group |
| Geely Automobile vs. Focus Home Interactive | Geely Automobile vs. Haier Smart Home | Geely Automobile vs. Haverty Furniture Companies | Geely Automobile vs. Broadridge Financial Solutions |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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