Correlation Between Geely Automobile and Arrival Vault
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Arrival Vault 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 Geely Automobile and Arrival Vault into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geely Automobile Holdings and Arrival Vault USA, you can compare the effects of market volatilities on Geely Automobile and Arrival Vault 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 Geely Automobile with a short position of Arrival Vault. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Arrival Vault.
Diversification Opportunities for Geely Automobile and Arrival Vault
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Geely and Arrival is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Arrival Vault USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrival Vault USA and Geely Automobile 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 Geely Automobile Holdings are associated (or correlated) with Arrival Vault. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrival Vault USA has no effect on the direction of Geely Automobile i.e., Geely Automobile and Arrival Vault go up and down completely randomly.
Pair Corralation between Geely Automobile and Arrival Vault
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 0.51 times more return on investment than Arrival Vault. However, Geely Automobile Holdings is 1.98 times less risky than Arrival Vault. It trades about 0.05 of its potential returns per unit of risk. Arrival Vault USA is currently generating about -0.14 per unit of risk. If you would invest 119.00 in Geely Automobile Holdings on August 31, 2024 and sell it today you would earn a total of 58.00 from holding Geely Automobile Holdings or generate 48.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 8.56% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Arrival Vault USA
Performance |
| Timeline |
| Geely Automobile Holdings |
| Arrival Vault USA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Geely Automobile and Arrival Vault Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Arrival Vault
The main advantage of trading using opposite Geely Automobile and Arrival Vault positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Arrival Vault 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 Arrival Vault will offset losses from the drop in Arrival Vault's long position.| Geely Automobile vs. Aston Martin Lagonda | Geely Automobile vs. Aston Martin Lagonda | Geely Automobile vs. Great Wall Motor | Geely Automobile vs. Polestar Automotive Holding |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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