Correlation Between ONWARD MEDICAL and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both ONWARD MEDICAL 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 ONWARD MEDICAL and Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ONWARD MEDICAL BV and Geely Automobile Holdings, you can compare the effects of market volatilities on ONWARD MEDICAL 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 ONWARD MEDICAL with a short position of Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONWARD MEDICAL and Geely Automobile.
Diversification Opportunities for ONWARD MEDICAL and Geely Automobile
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ONWARD and Geely is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding ONWARD MEDICAL BV 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 ONWARD MEDICAL 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 ONWARD MEDICAL BV 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 ONWARD MEDICAL i.e., ONWARD MEDICAL and Geely Automobile go up and down completely randomly.
Pair Corralation between ONWARD MEDICAL and Geely Automobile
Assuming the 90 days horizon ONWARD MEDICAL BV is expected to under-perform the Geely Automobile. But the stock apears to be less risky and, when comparing its historical volatility, ONWARD MEDICAL BV is 1.18 times less risky than Geely Automobile. The stock trades about -0.26 of its potential returns per unit of risk. The Geely Automobile Holdings is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 176.00 in Geely Automobile Holdings on November 28, 2024 and sell it today you would earn a total of 34.00 from holding Geely Automobile Holdings or generate 19.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ONWARD MEDICAL BV vs. Geely Automobile Holdings
Performance |
| Timeline |
| ONWARD MEDICAL BV |
| Geely Automobile Holdings |
ONWARD MEDICAL and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ONWARD MEDICAL and Geely Automobile
The main advantage of trading using opposite ONWARD MEDICAL and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONWARD MEDICAL 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.| ONWARD MEDICAL vs. Novo Nordisk AS | ONWARD MEDICAL vs. CSL LTD SPONADR | ONWARD MEDICAL vs. CSL Limited | ONWARD MEDICAL vs. Mercedes Benz Group AG |
| Geely Automobile vs. Elmos Semiconductor SE | Geely Automobile vs. DeVry Education Group | Geely Automobile vs. TOREX SEMICONDUCTOR LTD | Geely Automobile vs. Perdoceo Education |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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