Correlation Between Geely Automobile and Align Technology
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Align Technology 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 Align Technology 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 Align Technology, you can compare the effects of market volatilities on Geely Automobile and Align Technology 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 Align Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Align Technology.
Diversification Opportunities for Geely Automobile and Align Technology
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Geely and Align is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Align Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Align Technology 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 Align Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Align Technology has no effect on the direction of Geely Automobile i.e., Geely Automobile and Align Technology go up and down completely randomly.
Pair Corralation between Geely Automobile and Align Technology
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 0.83 times more return on investment than Align Technology. However, Geely Automobile Holdings is 1.21 times less risky than Align Technology. It trades about -0.22 of its potential returns per unit of risk. Align Technology is currently generating about -0.27 per unit of risk. If you would invest 191.00 in Geely Automobile Holdings on October 11, 2024 and sell it today you would lose (14.00) from holding Geely Automobile Holdings or give up 7.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Align Technology
Performance |
| Timeline |
| Geely Automobile Holdings |
| Align Technology |
Geely Automobile and Align Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Align Technology
The main advantage of trading using opposite Geely Automobile and Align Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Align Technology 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 Align Technology will offset losses from the drop in Align Technology's long position.| Geely Automobile vs. Hemisphere Energy Corp | Geely Automobile vs. Nippon Steel | Geely Automobile vs. Shenandoah Telecommunications | Geely Automobile vs. Liberty Broadband |
| Align Technology vs. TRADEDOUBLER AB SK | Align Technology vs. Northern Data AG | Align Technology vs. Alliance Data Systems | Align Technology vs. INFORMATION SVC GRP |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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