Correlation Between Geely Automobile and Zoom Video
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Zoom Video 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 Zoom Video 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 Zoom Video Communications, you can compare the effects of market volatilities on Geely Automobile and Zoom Video 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 Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Zoom Video.
Diversification Opportunities for Geely Automobile and Zoom Video
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Geely and Zoom is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications 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 Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of Geely Automobile i.e., Geely Automobile and Zoom Video go up and down completely randomly.
Pair Corralation between Geely Automobile and Zoom Video
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 1.28 times more return on investment than Zoom Video. However, Geely Automobile is 1.28 times more volatile than Zoom Video Communications. It trades about 0.06 of its potential returns per unit of risk. Zoom Video Communications is currently generating about 0.02 per unit of risk. If you would invest 95.00 in Geely Automobile Holdings on October 27, 2024 and sell it today you would earn a total of 82.00 from holding Geely Automobile Holdings or generate 86.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Zoom Video Communications
Performance |
| Timeline |
| Geely Automobile Holdings |
| Zoom Video Communications |
Geely Automobile and Zoom Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Zoom Video
The main advantage of trading using opposite Geely Automobile and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Zoom Video 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 Zoom Video will offset losses from the drop in Zoom Video's long position.| Geely Automobile vs. Scientific Games | Geely Automobile vs. PLAYTIKA HOLDING DL 01 | Geely Automobile vs. Gaming and Leisure | Geely Automobile vs. MOVIE GAMES SA |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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