Correlation Between Geely Automobile and PLAYTIKA HOLDING

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Can any of the company-specific risk be diversified away by investing in both Geely Automobile and PLAYTIKA HOLDING 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 PLAYTIKA HOLDING 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 PLAYTIKA HOLDING DL 01, you can compare the effects of market volatilities on Geely Automobile and PLAYTIKA HOLDING 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 PLAYTIKA HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and PLAYTIKA HOLDING.

Diversification Opportunities for Geely Automobile and PLAYTIKA HOLDING

GeelyPLAYTIKADiversified AwayGeelyPLAYTIKADiversified Away100%
-0.3
  Correlation Coefficient

Very good diversification

The 3 months correlation between Geely and PLAYTIKA is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and PLAYTIKA HOLDING DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYTIKA HOLDING 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 PLAYTIKA HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYTIKA HOLDING has no effect on the direction of Geely Automobile i.e., Geely Automobile and PLAYTIKA HOLDING go up and down completely randomly.

Pair Corralation between Geely Automobile and PLAYTIKA HOLDING

Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 1.12 times more return on investment than PLAYTIKA HOLDING. However, Geely Automobile is 1.12 times more volatile than PLAYTIKA HOLDING DL 01. It trades about 0.09 of its potential returns per unit of risk. PLAYTIKA HOLDING DL 01 is currently generating about -0.01 per unit of risk. If you would invest  75.00  in Geely Automobile Holdings on November 29, 2024 and sell it today you would earn a total of  145.00  from holding Geely Automobile Holdings or generate 193.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

Geely Automobile Holdings  vs.  PLAYTIKA HOLDING DL 01

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -100102030
JavaScript chart by amCharts 3.21.15GRU 8II
       Timeline  
Geely Automobile Holdings 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Geely Automobile Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Geely Automobile reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.71.81.922.12.2
PLAYTIKA HOLDING 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days PLAYTIKA HOLDING DL 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb6.46.66.877.27.47.67.88

Geely Automobile and PLAYTIKA HOLDING Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.52-7.13-4.74-2.350.02.555.157.7510.35 0.020.040.060.08
JavaScript chart by amCharts 3.21.15GRU 8II
       Returns  

Pair Trading with Geely Automobile and PLAYTIKA HOLDING

The main advantage of trading using opposite Geely Automobile and PLAYTIKA HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, PLAYTIKA HOLDING 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 PLAYTIKA HOLDING will offset losses from the drop in PLAYTIKA HOLDING's long position.
The idea behind Geely Automobile Holdings and PLAYTIKA HOLDING DL 01 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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