Correlation Between Geely Automobile and TERADATA
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and TERADATA 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 TERADATA 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 TERADATA, you can compare the effects of market volatilities on Geely Automobile and TERADATA 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 TERADATA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and TERADATA.
Diversification Opportunities for Geely Automobile and TERADATA
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Geely and TERADATA is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and TERADATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TERADATA 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 TERADATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TERADATA has no effect on the direction of Geely Automobile i.e., Geely Automobile and TERADATA go up and down completely randomly.
Pair Corralation between Geely Automobile and TERADATA
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 1.75 times more return on investment than TERADATA. However, Geely Automobile is 1.75 times more volatile than TERADATA. It trades about 0.01 of its potential returns per unit of risk. TERADATA is currently generating about -0.04 per unit of risk. If you would invest 170.00 in Geely Automobile Holdings on August 31, 2024 and sell it today you would lose (1.00) from holding Geely Automobile Holdings or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Geely Automobile Holdings vs. TERADATA
Performance |
| Timeline |
| Geely Automobile Holdings |
| TERADATA |
Geely Automobile and TERADATA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and TERADATA
The main advantage of trading using opposite Geely Automobile and TERADATA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, TERADATA 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 TERADATA will offset losses from the drop in TERADATA's long position.| Geely Automobile vs. MAVEN WIRELESS SWEDEN | Geely Automobile vs. SWISS WATER DECAFFCOFFEE | Geely Automobile vs. BJs Restaurants | Geely Automobile vs. HomeToGo SE |
| TERADATA vs. LIFENET INSURANCE CO | TERADATA vs. Check Point Software | TERADATA vs. REVO INSURANCE SPA | TERADATA vs. HANOVER INSURANCE |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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