Correlation Between CHINA EDUCATION and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both CHINA EDUCATION 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 CHINA EDUCATION and Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA EDUCATION GROUP and Geely Automobile Holdings, you can compare the effects of market volatilities on CHINA EDUCATION 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 CHINA EDUCATION with a short position of Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA EDUCATION and Geely Automobile.
Diversification Opportunities for CHINA EDUCATION and Geely Automobile
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CHINA and Geely is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding CHINA EDUCATION GROUP 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 CHINA EDUCATION 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 CHINA EDUCATION GROUP 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 CHINA EDUCATION i.e., CHINA EDUCATION and Geely Automobile go up and down completely randomly.
Pair Corralation between CHINA EDUCATION and Geely Automobile
Assuming the 90 days horizon CHINA EDUCATION GROUP is expected to under-perform the Geely Automobile. In addition to that, CHINA EDUCATION is 1.28 times more volatile than Geely Automobile Holdings. It trades about -0.21 of its total potential returns per unit of risk. Geely Automobile Holdings is currently generating about 0.32 per unit of volatility. If you would invest 178.00 in Geely Automobile Holdings on December 1, 2024 and sell it today you would earn a total of 57.00 from holding Geely Automobile Holdings or generate 32.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA EDUCATION GROUP vs. Geely Automobile Holdings
Performance |
| Timeline |
| CHINA EDUCATION GROUP |
| Geely Automobile Holdings |
CHINA EDUCATION and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA EDUCATION and Geely Automobile
The main advantage of trading using opposite CHINA EDUCATION and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA EDUCATION 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.| CHINA EDUCATION vs. United Breweries Co | CHINA EDUCATION vs. Infrastrutture Wireless Italiane | CHINA EDUCATION vs. T Mobile | CHINA EDUCATION vs. Monster Beverage Corp |
| Geely Automobile vs. Hitachi Construction Machinery | Geely Automobile vs. Agricultural Bank of | Geely Automobile vs. UNIVMUSIC GRPADR050 | Geely Automobile vs. Dairy Farm International |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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