Correlation Between Geely Automobile and LIFE +
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and 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 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 LIFE BANC SPLIT, you can compare the effects of market volatilities on Geely Automobile and 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 LIFE +. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and LIFE +.
Diversification Opportunities for Geely Automobile and LIFE +
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Geely and LIFE is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and LIFE BANC SPLIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFE BANC SPLIT 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 LIFE +. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFE BANC SPLIT has no effect on the direction of Geely Automobile i.e., Geely Automobile and LIFE + go up and down completely randomly.
Pair Corralation between Geely Automobile and LIFE +
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 0.97 times more return on investment than LIFE +. However, Geely Automobile Holdings is 1.03 times less risky than LIFE +. It trades about 0.08 of its potential returns per unit of risk. LIFE BANC SPLIT is currently generating about 0.04 per unit of risk. If you would invest 75.00 in Geely Automobile Holdings on August 29, 2024 and sell it today you would earn a total of 82.00 from holding Geely Automobile Holdings or generate 109.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. LIFE BANC SPLIT
Performance |
| Timeline |
| Geely Automobile Holdings |
| LIFE BANC SPLIT |
Geely Automobile and LIFE + Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and LIFE +
The main advantage of trading using opposite Geely Automobile and LIFE + positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, 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 LIFE + will offset losses from the drop in LIFE +'s long position.| Geely Automobile vs. Superior Plus Corp | Geely Automobile vs. NMI Holdings | Geely Automobile vs. Origin Agritech | Geely Automobile vs. SIVERS SEMICONDUCTORS AB |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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