Correlation Between Geely Automobile and ALEFARM BREWING
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and ALEFARM BREWING 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 ALEFARM BREWING 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 ALEFARM BREWING DK 05, you can compare the effects of market volatilities on Geely Automobile and ALEFARM BREWING 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 ALEFARM BREWING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and ALEFARM BREWING.
Diversification Opportunities for Geely Automobile and ALEFARM BREWING
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Geely and ALEFARM is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and ALEFARM BREWING DK 05 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALEFARM BREWING DK 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 ALEFARM BREWING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALEFARM BREWING DK has no effect on the direction of Geely Automobile i.e., Geely Automobile and ALEFARM BREWING go up and down completely randomly.
Pair Corralation between Geely Automobile and ALEFARM BREWING
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 0.6 times more return on investment than ALEFARM BREWING. However, Geely Automobile Holdings is 1.66 times less risky than ALEFARM BREWING. It trades about 0.04 of its potential returns per unit of risk. ALEFARM BREWING DK 05 is currently generating about -0.02 per unit of risk. If you would invest 170.00 in Geely Automobile Holdings on October 30, 2024 and sell it today you would earn a total of 7.00 from holding Geely Automobile Holdings or generate 4.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. ALEFARM BREWING DK 05
Performance |
| Timeline |
| Geely Automobile Holdings |
| ALEFARM BREWING DK |
Geely Automobile and ALEFARM BREWING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and ALEFARM BREWING
The main advantage of trading using opposite Geely Automobile and ALEFARM BREWING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, ALEFARM BREWING 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 ALEFARM BREWING will offset losses from the drop in ALEFARM BREWING's long position.| Geely Automobile vs. LANDSEA GREEN MANAGEMENT | Geely Automobile vs. AEGEAN AIRLINES | Geely Automobile vs. Corporate Travel Management | Geely Automobile vs. American Airlines Group |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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