Correlation Between GlobalData PLC and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both GlobalData PLC 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 GlobalData PLC and Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlobalData PLC and Geely Automobile Holdings, you can compare the effects of market volatilities on GlobalData PLC 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 GlobalData PLC with a short position of Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalData PLC and Geely Automobile.
Diversification Opportunities for GlobalData PLC and Geely Automobile
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between GlobalData and Geely is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding GlobalData PLC 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 GlobalData PLC 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 GlobalData PLC 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 GlobalData PLC i.e., GlobalData PLC and Geely Automobile go up and down completely randomly.
Pair Corralation between GlobalData PLC and Geely Automobile
Assuming the 90 days trading horizon GlobalData PLC is expected to under-perform the Geely Automobile. But the stock apears to be less risky and, when comparing its historical volatility, GlobalData PLC is 1.91 times less risky than Geely Automobile. The stock trades about -0.35 of its potential returns per unit of risk. The Geely Automobile Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,500 in Geely Automobile Holdings on November 7, 2024 and sell it today you would earn a total of 0.00 from holding Geely Automobile Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
GlobalData PLC vs. Geely Automobile Holdings
Performance |
| Timeline |
| GlobalData PLC |
| Geely Automobile Holdings |
GlobalData PLC and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlobalData PLC and Geely Automobile
The main advantage of trading using opposite GlobalData PLC and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalData PLC 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.| GlobalData PLC vs. Cairo Communication SpA | GlobalData PLC vs. PureTech Health plc | GlobalData PLC vs. HCA Healthcare | GlobalData PLC vs. Induction Healthcare Group |
| Geely Automobile vs. Samsung Electronics Co | Geely Automobile vs. Samsung Electronics Co | Geely Automobile vs. Toyota Motor Corp | Geely Automobile vs. Reliance Industries Ltd |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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