Correlation Between INTER CARS and GEELY AUTOMOBILE
Can any of the company-specific risk be diversified away by investing in both INTER CARS 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 INTER CARS and GEELY AUTOMOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTER CARS SA and GEELY AUTOMOBILE, you can compare the effects of market volatilities on INTER CARS 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 INTER CARS with a short position of GEELY AUTOMOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and GEELY AUTOMOBILE.
Diversification Opportunities for INTER CARS and GEELY AUTOMOBILE
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between INTER and GEELY is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE and INTER CARS 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 INTER CARS SA 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 INTER CARS i.e., INTER CARS and GEELY AUTOMOBILE go up and down completely randomly.
Pair Corralation between INTER CARS and GEELY AUTOMOBILE
Assuming the 90 days horizon INTER CARS SA is expected to generate 1.24 times more return on investment than GEELY AUTOMOBILE. However, INTER CARS is 1.24 times more volatile than GEELY AUTOMOBILE. It trades about 0.27 of its potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about 0.02 per unit of risk. If you would invest 11,880 in INTER CARS SA on November 2, 2024 and sell it today you would earn a total of 1,280 from holding INTER CARS SA or generate 10.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTER CARS SA vs. GEELY AUTOMOBILE
Performance |
| Timeline |
| INTER CARS SA |
| GEELY AUTOMOBILE |
INTER CARS and GEELY AUTOMOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and GEELY AUTOMOBILE
The main advantage of trading using opposite INTER CARS and GEELY AUTOMOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS 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.| INTER CARS vs. Cardinal Health | INTER CARS vs. National Health Investors | INTER CARS vs. Chunghwa Telecom Co | INTER CARS vs. HEALTHSTREAM |
| GEELY AUTOMOBILE vs. NORWEGIAN AIR SHUT | GEELY AUTOMOBILE vs. Air New Zealand | GEELY AUTOMOBILE vs. Corsair Gaming | GEELY AUTOMOBILE vs. Delta Air Lines |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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