Correlation Between Geely Automobile and Sime Darby
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Sime Darby 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 Sime Darby 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 Sime Darby Bhd, you can compare the effects of market volatilities on Geely Automobile and Sime Darby 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 Sime Darby. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Sime Darby.
Diversification Opportunities for Geely Automobile and Sime Darby
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Geely and Sime is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Sime Darby Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sime Darby Bhd 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 Sime Darby. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sime Darby Bhd has no effect on the direction of Geely Automobile i.e., Geely Automobile and Sime Darby go up and down completely randomly.
Pair Corralation between Geely Automobile and Sime Darby
Assuming the 90 days horizon Geely Automobile is expected to generate 3.65 times less return on investment than Sime Darby. But when comparing it to its historical volatility, Geely Automobile Holdings is 1.15 times less risky than Sime Darby. It trades about 0.02 of its potential returns per unit of risk. Sime Darby Bhd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 30.00 in Sime Darby Bhd on August 24, 2024 and sell it today you would earn a total of 21.00 from holding Sime Darby Bhd or generate 70.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 61.49% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Sime Darby Bhd
Performance |
| Timeline |
| Geely Automobile Holdings |
| Sime Darby Bhd |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Geely Automobile and Sime Darby Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Sime Darby
The main advantage of trading using opposite Geely Automobile and Sime Darby positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Sime Darby 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 Sime Darby will offset losses from the drop in Sime Darby'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 |
| Sime Darby vs. Zapp Electric Vehicles | Sime Darby vs. First Hydrogen Corp | Sime Darby vs. Guangzhou Automobile Group | Sime Darby vs. Phoenix Motor Common |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |