Correlation Between Geely Automobile and United Insurance
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and United Insurance 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 United Insurance 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 United Insurance Holdings, you can compare the effects of market volatilities on Geely Automobile and United Insurance 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 United Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and United Insurance.
Diversification Opportunities for Geely Automobile and United Insurance
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Geely and United is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and United Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Insurance Holdings 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 United Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Insurance Holdings has no effect on the direction of Geely Automobile i.e., Geely Automobile and United Insurance go up and down completely randomly.
Pair Corralation between Geely Automobile and United Insurance
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 0.87 times more return on investment than United Insurance. However, Geely Automobile Holdings is 1.15 times less risky than United Insurance. It trades about 0.08 of its potential returns per unit of risk. United Insurance Holdings is currently generating about -0.05 per unit of risk. If you would invest 167.00 in Geely Automobile Holdings on October 30, 2024 and sell it today you would earn a total of 10.00 from holding Geely Automobile Holdings or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. United Insurance Holdings
Performance |
| Timeline |
| Geely Automobile Holdings |
| United Insurance Holdings |
Geely Automobile and United Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and United Insurance
The main advantage of trading using opposite Geely Automobile and United Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, United Insurance 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 United Insurance will offset losses from the drop in United Insurance's long position.| Geely Automobile vs. LANDSEA GREEN MANAGEMENT | Geely Automobile vs. AEGEAN AIRLINES | Geely Automobile vs. Corporate Travel Management | Geely Automobile vs. American Airlines Group |
| United Insurance vs. TEN SQUARE GAMES | United Insurance vs. Major Drilling Group | United Insurance vs. GEAR4MUSIC LS 10 | United Insurance vs. Games Workshop Group |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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