Correlation Between Aston Martin and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both Aston Martin 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 Aston Martin and Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aston Martin Lagonda and Geely Automobile Holdings, you can compare the effects of market volatilities on Aston Martin 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 Aston Martin with a short position of Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aston Martin and Geely Automobile.
Diversification Opportunities for Aston Martin and Geely Automobile
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aston and Geely is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Aston Martin Lagonda 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 Aston Martin 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 Aston Martin Lagonda 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 Aston Martin i.e., Aston Martin and Geely Automobile go up and down completely randomly.
Pair Corralation between Aston Martin and Geely Automobile
Assuming the 90 days horizon Aston Martin Lagonda is expected to under-perform the Geely Automobile. In addition to that, Aston Martin is 2.12 times more volatile than Geely Automobile Holdings. It trades about -0.05 of its total potential returns per unit of risk. Geely Automobile Holdings is currently generating about 0.01 per unit of volatility. If you would invest 3,763 in Geely Automobile Holdings on November 1, 2024 and sell it today you would earn a total of 1.00 from holding Geely Automobile Holdings or generate 0.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Aston Martin Lagonda vs. Geely Automobile Holdings
Performance |
| Timeline |
| Aston Martin Lagonda |
| Geely Automobile Holdings |
Aston Martin and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aston Martin and Geely Automobile
The main advantage of trading using opposite Aston Martin and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aston Martin 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.| Aston Martin vs. Polestar Automotive Holding | Aston Martin vs. Geely Automobile Holdings | Aston Martin vs. Mercedes Benz Group AG | Aston Martin vs. Porsche Automobile Holding |
| Geely Automobile vs. Great Wall Motor | Geely Automobile vs. Polestar Automotive Holding | Geely Automobile vs. Dowlais Group plc | Geely Automobile vs. BYD Company Limited |
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.
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