Correlation Between Geely Automobile and BROOKFBH 462
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and BROOKFBH 462 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 BROOKFBH 462 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 BROOKFBH 462 PRSNU, you can compare the effects of market volatilities on Geely Automobile and BROOKFBH 462 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 BROOKFBH 462. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and BROOKFBH 462.
Diversification Opportunities for Geely Automobile and BROOKFBH 462
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Geely and BROOKFBH is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and BROOKFBH 462 PRSNU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROOKFBH 462 PRSNU 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 BROOKFBH 462. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROOKFBH 462 PRSNU has no effect on the direction of Geely Automobile i.e., Geely Automobile and BROOKFBH 462 go up and down completely randomly.
Pair Corralation between Geely Automobile and BROOKFBH 462
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 0.55 times more return on investment than BROOKFBH 462. However, Geely Automobile Holdings is 1.82 times less risky than BROOKFBH 462. It trades about 0.01 of its potential returns per unit of risk. BROOKFBH 462 PRSNU is currently generating about -0.02 per unit of risk. If you would invest 177.00 in Geely Automobile Holdings on November 2, 2024 and sell it today you would earn a total of 0.00 from holding Geely Automobile Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. BROOKFBH 462 PRSNU
Performance |
| Timeline |
| Geely Automobile Holdings |
| BROOKFBH 462 PRSNU |
Geely Automobile and BROOKFBH 462 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and BROOKFBH 462
The main advantage of trading using opposite Geely Automobile and BROOKFBH 462 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, BROOKFBH 462 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 BROOKFBH 462 will offset losses from the drop in BROOKFBH 462's long position.| Geely Automobile vs. Telecom Argentina SA | Geely Automobile vs. Highlight Communications AG | Geely Automobile vs. CanSino Biologics | Geely Automobile vs. CENTURIA OFFICE REIT |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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