Correlation Between Geely Automobile and Haverty Furniture
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Haverty Furniture 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 Haverty Furniture 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 Haverty Furniture Companies, you can compare the effects of market volatilities on Geely Automobile and Haverty Furniture 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 Haverty Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Haverty Furniture.
Diversification Opportunities for Geely Automobile and Haverty Furniture
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Geely and Haverty is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture 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 Haverty Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haverty Furniture has no effect on the direction of Geely Automobile i.e., Geely Automobile and Haverty Furniture go up and down completely randomly.
Pair Corralation between Geely Automobile and Haverty Furniture
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 1.21 times more return on investment than Haverty Furniture. However, Geely Automobile is 1.21 times more volatile than Haverty Furniture Companies. It trades about 0.14 of its potential returns per unit of risk. Haverty Furniture Companies is currently generating about -0.04 per unit of risk. If you would invest 75.00 in Geely Automobile Holdings on September 12, 2024 and sell it today you would earn a total of 118.00 from holding Geely Automobile Holdings or generate 157.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Haverty Furniture Companies
Performance |
| Timeline |
| Geely Automobile Holdings |
| Haverty Furniture |
Geely Automobile and Haverty Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Haverty Furniture
The main advantage of trading using opposite Geely Automobile and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Haverty Furniture 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 Haverty Furniture will offset losses from the drop in Haverty Furniture's long position.| Geely Automobile vs. BYD Company Limited | Geely Automobile vs. MERCEDES BENZ GRP ADR14 | Geely Automobile vs. Superior Plus Corp | Geely Automobile vs. SIVERS SEMICONDUCTORS AB |
| Haverty Furniture vs. Lowes Companies | Haverty Furniture vs. Superior Plus Corp | Haverty Furniture vs. SIVERS SEMICONDUCTORS AB | Haverty Furniture vs. NorAm Drilling AS |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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