Correlation Between Computer and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both Computer 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 Computer and Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Computer And Technologies and Geely Automobile Holdings, you can compare the effects of market volatilities on Computer 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 Computer with a short position of Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer and Geely Automobile.
Diversification Opportunities for Computer and Geely Automobile
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Computer and Geely is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Computer And Technologies 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 Computer 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 Computer And Technologies 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 Computer i.e., Computer and Geely Automobile go up and down completely randomly.
Pair Corralation between Computer and Geely Automobile
Assuming the 90 days horizon Computer is expected to generate 1.11 times less return on investment than Geely Automobile. In addition to that, Computer is 1.49 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 0.08 per unit of volatility. If you would invest 90.00 in Geely Automobile Holdings on August 31, 2024 and sell it today you would earn a total of 79.00 from holding Geely Automobile Holdings or generate 87.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Computer And Technologies vs. Geely Automobile Holdings
Performance |
| Timeline |
| Computer And Technologies |
| Geely Automobile Holdings |
Computer and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computer and Geely Automobile
The main advantage of trading using opposite Computer and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer 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.| Computer vs. Uber Technologies | Computer vs. AAC TECHNOLOGHLDGADR | Computer vs. SALESFORCE INC CDR | Computer vs. ScanSource |
| Geely Automobile vs. NORWEGIAN AIR SHUT | Geely Automobile vs. Penta Ocean Construction Co | Geely Automobile vs. DAIRY FARM INTL | Geely Automobile vs. Ryanair Holdings plc |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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