Correlation Between Geely Automobile and Canoo
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Canoo 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 Canoo 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 Canoo Inc, you can compare the effects of market volatilities on Geely Automobile and Canoo 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 Canoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Canoo.
Diversification Opportunities for Geely Automobile and Canoo
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Geely and Canoo is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Canoo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canoo 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 Canoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canoo Inc has no effect on the direction of Geely Automobile i.e., Geely Automobile and Canoo go up and down completely randomly.
Pair Corralation between Geely Automobile and Canoo
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 0.29 times more return on investment than Canoo. However, Geely Automobile Holdings is 3.39 times less risky than Canoo. It trades about 0.05 of its potential returns per unit of risk. Canoo Inc is currently generating about -0.07 per unit of risk. If you would invest 2,472 in Geely Automobile Holdings on August 28, 2024 and sell it today you would earn a total of 868.00 from holding Geely Automobile Holdings or generate 35.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Canoo Inc
Performance |
| Timeline |
| Geely Automobile Holdings |
| Canoo Inc |
Geely Automobile and Canoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Canoo
The main advantage of trading using opposite Geely Automobile and Canoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Canoo 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 Canoo will offset losses from the drop in Canoo'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 |
| Canoo vs. Lucid Group | Canoo vs. Rivian Automotive | Canoo vs. Polestar Automotive Holding | Canoo vs. Mullen Automotive |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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