Correlation Between FORMPIPE SOFTWARE and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE and Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FORMPIPE SOFTWARE AB and Geely Automobile Holdings, you can compare the effects of market volatilities on FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE with a short position of Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORMPIPE SOFTWARE and Geely Automobile.
Diversification Opportunities for FORMPIPE SOFTWARE and Geely Automobile
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FORMPIPE and Geely is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding FORMPIPE SOFTWARE AB 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 FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE AB 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 FORMPIPE SOFTWARE i.e., FORMPIPE SOFTWARE and Geely Automobile go up and down completely randomly.
Pair Corralation between FORMPIPE SOFTWARE and Geely Automobile
Assuming the 90 days horizon FORMPIPE SOFTWARE AB is expected to under-perform the Geely Automobile. In addition to that, FORMPIPE SOFTWARE is 1.54 times more volatile than Geely Automobile Holdings. It trades about -0.02 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 167.00 in Geely Automobile Holdings on October 30, 2024 and sell it today you would earn a total of 10.00 from holding Geely Automobile Holdings or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FORMPIPE SOFTWARE AB vs. Geely Automobile Holdings
Performance |
| Timeline |
| FORMPIPE SOFTWARE |
| Geely Automobile Holdings |
FORMPIPE SOFTWARE and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORMPIPE SOFTWARE and Geely Automobile
The main advantage of trading using opposite FORMPIPE SOFTWARE and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORMPIPE SOFTWARE 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.| FORMPIPE SOFTWARE vs. Ryanair Holdings plc | FORMPIPE SOFTWARE vs. RYANAIR HLDGS ADR | FORMPIPE SOFTWARE vs. FORWARD AIR P | FORMPIPE SOFTWARE vs. QBE Insurance Group |
| Geely Automobile vs. LANDSEA GREEN MANAGEMENT | Geely Automobile vs. AEGEAN AIRLINES | Geely Automobile vs. Corporate Travel Management | Geely Automobile vs. American Airlines Group |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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