Correlation Between Geely Automobile and Exor NV
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Exor NV 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 Exor NV 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 Exor NV, you can compare the effects of market volatilities on Geely Automobile and Exor NV 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 Exor NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Exor NV.
Diversification Opportunities for Geely Automobile and Exor NV
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Geely and Exor is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Exor NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exor NV 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 Exor NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exor NV has no effect on the direction of Geely Automobile i.e., Geely Automobile and Exor NV go up and down completely randomly.
Pair Corralation between Geely Automobile and Exor NV
Assuming the 90 days horizon Geely Automobile is expected to generate 1.08 times less return on investment than Exor NV. In addition to that, Geely Automobile is 1.5 times more volatile than Exor NV. It trades about 0.02 of its total potential returns per unit of risk. Exor NV is currently generating about 0.04 per unit of volatility. If you would invest 7,914 in Exor NV on August 24, 2024 and sell it today you would earn a total of 1,957 from holding Exor NV or generate 24.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 92.14% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Exor NV
Performance |
| Timeline |
| Geely Automobile Holdings |
| Exor NV |
Geely Automobile and Exor NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Exor NV
The main advantage of trading using opposite Geely Automobile and Exor NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Exor NV 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 Exor NV will offset losses from the drop in Exor NV's long position.| Geely Automobile vs. Great Wall Motor | Geely Automobile vs. Polestar Automotive Holding | Geely Automobile vs. Dowlais Group plc | Geely Automobile vs. BYD Company Limited |
| Exor NV vs. Zapp Electric Vehicles | Exor NV vs. Guangzhou Automobile Group | Exor NV vs. NFI Group | Exor NV vs. Honda Motor Co |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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