Correlation Between Geely Automobile and Khiron Life
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Khiron Life 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 Khiron Life 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 Khiron Life Sciences, you can compare the effects of market volatilities on Geely Automobile and Khiron Life 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 Khiron Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Khiron Life.
Diversification Opportunities for Geely Automobile and Khiron Life
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Geely and Khiron is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Khiron Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Khiron Life Sciences 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 Khiron Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Khiron Life Sciences has no effect on the direction of Geely Automobile i.e., Geely Automobile and Khiron Life go up and down completely randomly.
Pair Corralation between Geely Automobile and Khiron Life
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 0.76 times more return on investment than Khiron Life. However, Geely Automobile Holdings is 1.32 times less risky than Khiron Life. It trades about 0.06 of its potential returns per unit of risk. Khiron Life Sciences is currently generating about -0.04 per unit of risk. If you would invest 94.00 in Geely Automobile Holdings on October 11, 2024 and sell it today you would earn a total of 78.00 from holding Geely Automobile Holdings or generate 82.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Khiron Life Sciences
Performance |
| Timeline |
| Geely Automobile Holdings |
| Khiron Life Sciences |
Geely Automobile and Khiron Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Khiron Life
The main advantage of trading using opposite Geely Automobile and Khiron Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Khiron Life 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 Khiron Life will offset losses from the drop in Khiron Life's long position.| Geely Automobile vs. Hemisphere Energy Corp | Geely Automobile vs. Nippon Steel | Geely Automobile vs. Shenandoah Telecommunications | Geely Automobile vs. Liberty Broadband |
| Khiron Life vs. Shenandoah Telecommunications | Khiron Life vs. Zoom Video Communications | Khiron Life vs. Highlight Communications AG | Khiron Life vs. Minerals Technologies |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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