Correlation Between Geely Automobile and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Gladstone Investment 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 Gladstone Investment 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 Gladstone Investment, you can compare the effects of market volatilities on Geely Automobile and Gladstone Investment 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 Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Gladstone Investment.
Diversification Opportunities for Geely Automobile and Gladstone Investment
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Geely and Gladstone is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment 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 Gladstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Investment has no effect on the direction of Geely Automobile i.e., Geely Automobile and Gladstone Investment go up and down completely randomly.
Pair Corralation between Geely Automobile and Gladstone Investment
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 1.78 times more return on investment than Gladstone Investment. However, Geely Automobile is 1.78 times more volatile than Gladstone Investment. It trades about 0.05 of its potential returns per unit of risk. Gladstone Investment is currently generating about 0.05 per unit of risk. If you would invest 97.00 in Geely Automobile Holdings on September 3, 2024 and sell it today you would earn a total of 70.00 from holding Geely Automobile Holdings or generate 72.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Gladstone Investment
Performance |
| Timeline |
| Geely Automobile Holdings |
| Gladstone Investment |
Geely Automobile and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Gladstone Investment
The main advantage of trading using opposite Geely Automobile and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Gladstone Investment 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 Gladstone Investment will offset losses from the drop in Gladstone Investment's long position.| Geely Automobile vs. Tesla Inc | Geely Automobile vs. Toyota Motor | Geely Automobile vs. BYD Company Limited | Geely Automobile vs. Superior Plus Corp |
| Gladstone Investment vs. Perseus Mining Limited | Gladstone Investment vs. Sunstone Hotel Investors | Gladstone Investment vs. GRIFFIN MINING LTD | Gladstone Investment vs. Playa Hotels Resorts |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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