Correlation Between Geely Automobile and Fisker
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Fisker 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 Fisker 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 Fisker Inc, you can compare the effects of market volatilities on Geely Automobile and Fisker 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 Fisker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Fisker.
Diversification Opportunities for Geely Automobile and Fisker
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Geely and Fisker is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Fisker Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fisker Inc 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 Fisker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fisker Inc has no effect on the direction of Geely Automobile i.e., Geely Automobile and Fisker go up and down completely randomly.
Pair Corralation between Geely Automobile and Fisker
Assuming the 90 days horizon Geely Automobile is expected to generate 2.64 times less return on investment than Fisker. But when comparing it to its historical volatility, Geely Automobile Holdings is 1.94 times less risky than Fisker. It trades about 0.05 of its potential returns per unit of risk. Fisker Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 570.00 in Fisker Inc on August 31, 2024 and sell it today you would earn a total of 45.00 from holding Fisker Inc or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 8.29% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Fisker Inc
Performance |
| Timeline |
| Geely Automobile Holdings |
| Fisker Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Geely Automobile and Fisker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Fisker
The main advantage of trading using opposite Geely Automobile and Fisker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Fisker 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 Fisker will offset losses from the drop in Fisker'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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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