Correlation Between Adriatic Metals and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both Adriatic Metals 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 Adriatic Metals and Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adriatic Metals and Geely Automobile Holdings, you can compare the effects of market volatilities on Adriatic Metals 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 Adriatic Metals with a short position of Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adriatic Metals and Geely Automobile.
Diversification Opportunities for Adriatic Metals and Geely Automobile
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Adriatic and Geely is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Adriatic Metals 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 Adriatic Metals 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 Adriatic Metals 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 Adriatic Metals i.e., Adriatic Metals and Geely Automobile go up and down completely randomly.
Pair Corralation between Adriatic Metals and Geely Automobile
Assuming the 90 days trading horizon Adriatic Metals is expected to generate 3.14 times less return on investment than Geely Automobile. But when comparing it to its historical volatility, Adriatic Metals is 4.39 times less risky than Geely Automobile. It trades about 0.13 of its potential returns per unit of risk. Geely Automobile Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 894.00 in Geely Automobile Holdings on November 2, 2024 and sell it today you would earn a total of 606.00 from holding Geely Automobile Holdings or generate 67.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adriatic Metals vs. Geely Automobile Holdings
Performance |
| Timeline |
| Adriatic Metals |
| Geely Automobile Holdings |
Adriatic Metals and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adriatic Metals and Geely Automobile
The main advantage of trading using opposite Adriatic Metals and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adriatic Metals 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.| Adriatic Metals vs. Flutter Entertainment PLC | Adriatic Metals vs. Atresmedia | Adriatic Metals vs. Spire Healthcare Group | Adriatic Metals vs. JD Sports Fashion |
| Geely Automobile vs. Sartorius Stedim Biotech | Geely Automobile vs. Polar Capital Technology | Geely Automobile vs. Eneraqua Technologies PLC | Geely Automobile vs. Coor Service Management |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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