Correlation Between Geely Automobile and Isuzu Motors
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Isuzu Motors 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 Isuzu Motors 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 Isuzu Motors, you can compare the effects of market volatilities on Geely Automobile and Isuzu Motors 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 Isuzu Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Isuzu Motors.
Diversification Opportunities for Geely Automobile and Isuzu Motors
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Geely and Isuzu is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Isuzu Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Isuzu Motors 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 Isuzu Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Isuzu Motors has no effect on the direction of Geely Automobile i.e., Geely Automobile and Isuzu Motors go up and down completely randomly.
Pair Corralation between Geely Automobile and Isuzu Motors
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 1.32 times more return on investment than Isuzu Motors. However, Geely Automobile is 1.32 times more volatile than Isuzu Motors. It trades about 0.03 of its potential returns per unit of risk. Isuzu Motors is currently generating about 0.02 per unit of risk. If you would invest 2,848 in Geely Automobile Holdings on August 31, 2024 and sell it today you would earn a total of 514.00 from holding Geely Automobile Holdings or generate 18.05% 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. Isuzu Motors
Performance |
| Timeline |
| Geely Automobile Holdings |
| Isuzu Motors |
Geely Automobile and Isuzu Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Isuzu Motors
The main advantage of trading using opposite Geely Automobile and Isuzu Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Isuzu Motors 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 Isuzu Motors will offset losses from the drop in Isuzu Motors' long position.| Geely Automobile vs. Volkswagen AG 110 | Geely Automobile vs. Stellantis NV | Geely Automobile vs. Toyota Motor | Geely Automobile vs. Honda Motor Co |
| Isuzu Motors vs. Suzuki Motor Corp | Isuzu Motors vs. Mitsubishi Estate Co | Isuzu Motors vs. Daiwa House Industry | Isuzu Motors vs. Mitsubishi Electric Corp |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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