Correlation Between Geely Automobile and Mazda
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Mazda 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 Mazda 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 Mazda Motor, you can compare the effects of market volatilities on Geely Automobile and Mazda 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 Mazda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Mazda.
Diversification Opportunities for Geely Automobile and Mazda
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Geely and Mazda is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Mazda Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mazda Motor 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 Mazda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mazda Motor has no effect on the direction of Geely Automobile i.e., Geely Automobile and Mazda go up and down completely randomly.
Pair Corralation between Geely Automobile and Mazda
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 0.95 times more return on investment than Mazda. However, Geely Automobile Holdings is 1.05 times less risky than Mazda. It trades about 0.1 of its potential returns per unit of risk. Mazda Motor is currently generating about -0.1 per unit of risk. If you would invest 2,475 in Geely Automobile Holdings on September 3, 2024 and sell it today you would earn a total of 1,103 from holding Geely Automobile Holdings or generate 44.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.63% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Mazda Motor
Performance |
| Timeline |
| Geely Automobile Holdings |
| Mazda Motor |
Geely Automobile and Mazda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Mazda
The main advantage of trading using opposite Geely Automobile and Mazda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Mazda 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 Mazda will offset losses from the drop in Mazda'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 |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |