Correlation Between Geely Automobile and YAOKO CO
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and YAOKO CO 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 YAOKO CO 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 YAOKO LTD, you can compare the effects of market volatilities on Geely Automobile and YAOKO CO 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 YAOKO CO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and YAOKO CO.
Diversification Opportunities for Geely Automobile and YAOKO CO
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Geely and YAOKO is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and YAOKO LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YAOKO LTD 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 YAOKO CO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YAOKO LTD has no effect on the direction of Geely Automobile i.e., Geely Automobile and YAOKO CO go up and down completely randomly.
Pair Corralation between Geely Automobile and YAOKO CO
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 3.88 times more return on investment than YAOKO CO. However, Geely Automobile is 3.88 times more volatile than YAOKO LTD. It trades about 0.32 of its potential returns per unit of risk. YAOKO LTD is currently generating about 0.18 per unit of risk. If you would invest 178.00 in Geely Automobile Holdings on December 1, 2024 and sell it today you would earn a total of 57.00 from holding Geely Automobile Holdings or generate 32.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Geely Automobile Holdings vs. YAOKO LTD
Performance |
| Timeline |
| Geely Automobile Holdings |
| YAOKO LTD |
Geely Automobile and YAOKO CO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and YAOKO CO
The main advantage of trading using opposite Geely Automobile and YAOKO CO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, YAOKO CO 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 YAOKO CO will offset losses from the drop in YAOKO CO's long position.| Geely Automobile vs. Hitachi Construction Machinery | Geely Automobile vs. Agricultural Bank of | Geely Automobile vs. UNIVMUSIC GRPADR050 | Geely Automobile vs. Dairy Farm International |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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