Correlation Between Canoo and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both Canoo and Geely Automobile 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 Canoo and Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canoo Inc and Geely Automobile Holdings, you can compare the effects of market volatilities on Canoo and Geely Automobile 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 Canoo with a short position of Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canoo and Geely Automobile.
Diversification Opportunities for Canoo and Geely Automobile
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canoo and Geely is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Canoo Inc and Geely Automobile Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geely Automobile Holdings and Canoo 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 Canoo Inc are associated (or correlated) with Geely Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geely Automobile Holdings has no effect on the direction of Canoo i.e., Canoo and Geely Automobile go up and down completely randomly.
Pair Corralation between Canoo and Geely Automobile
Given the investment horizon of 90 days Canoo Inc is expected to under-perform the Geely Automobile. In addition to that, Canoo is 10.62 times more volatile than Geely Automobile Holdings. It trades about -0.15 of its total potential returns per unit of risk. Geely Automobile Holdings is currently generating about -0.12 per unit of volatility. If you would invest 189.00 in Geely Automobile Holdings on November 1, 2024 and sell it today you would lose (9.00) from holding Geely Automobile Holdings or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canoo Inc vs. Geely Automobile Holdings
Performance |
| Timeline |
| Canoo Inc |
| Geely Automobile Holdings |
Canoo and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canoo and Geely Automobile
The main advantage of trading using opposite Canoo and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canoo position performs unexpectedly, Geely Automobile 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 Geely Automobile will offset losses from the drop in Geely Automobile's long position.| Canoo vs. Lucid Group | Canoo vs. Rivian Automotive | Canoo vs. Polestar Automotive Holding | Canoo vs. Mullen Automotive |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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