Correlation Between REGAL ASIAN and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN 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 REGAL ASIAN and Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REGAL ASIAN INVESTMENTS and Geely Automobile Holdings, you can compare the effects of market volatilities on REGAL ASIAN 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 REGAL ASIAN with a short position of Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and Geely Automobile.
Diversification Opportunities for REGAL ASIAN and Geely Automobile
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between REGAL and Geely is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS 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 REGAL ASIAN 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 REGAL ASIAN INVESTMENTS 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 REGAL ASIAN i.e., REGAL ASIAN and Geely Automobile go up and down completely randomly.
Pair Corralation between REGAL ASIAN and Geely Automobile
Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to under-perform the Geely Automobile. But the stock apears to be less risky and, when comparing its historical volatility, REGAL ASIAN INVESTMENTS is 2.05 times less risky than Geely Automobile. The stock trades about -0.2 of its potential returns per unit of risk. The Geely Automobile Holdings is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 170.00 in Geely Automobile Holdings on September 4, 2024 and sell it today you would lose (3.00) from holding Geely Automobile Holdings or give up 1.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL ASIAN INVESTMENTS vs. Geely Automobile Holdings
Performance |
| Timeline |
| REGAL ASIAN INVESTMENTS |
| Geely Automobile Holdings |
REGAL ASIAN and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL ASIAN and Geely Automobile
The main advantage of trading using opposite REGAL ASIAN and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN 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.| REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc |
| Geely Automobile vs. Tesla Inc | Geely Automobile vs. Toyota Motor | Geely Automobile vs. BYD Company Limited | Geely Automobile vs. Superior Plus Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |