Correlation Between Geely Automobile and Chengdu PUTIAN
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Chengdu PUTIAN 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 Chengdu PUTIAN 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 Chengdu PUTIAN Telecommunications, you can compare the effects of market volatilities on Geely Automobile and Chengdu PUTIAN 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 Chengdu PUTIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Chengdu PUTIAN.
Diversification Opportunities for Geely Automobile and Chengdu PUTIAN
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Geely and Chengdu is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Chengdu PUTIAN Telecommunicati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu PUTIAN Telec 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 Chengdu PUTIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu PUTIAN Telec has no effect on the direction of Geely Automobile i.e., Geely Automobile and Chengdu PUTIAN go up and down completely randomly.
Pair Corralation between Geely Automobile and Chengdu PUTIAN
Assuming the 90 days horizon Geely Automobile is expected to generate 40.99 times less return on investment than Chengdu PUTIAN. But when comparing it to its historical volatility, Geely Automobile Holdings is 2.13 times less risky than Chengdu PUTIAN. It trades about 0.01 of its potential returns per unit of risk. Chengdu PUTIAN Telecommunications is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 7.15 in Chengdu PUTIAN Telecommunications on November 2, 2024 and sell it today you would earn a total of 0.65 from holding Chengdu PUTIAN Telecommunications or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Chengdu PUTIAN Telecommunicati
Performance |
| Timeline |
| Geely Automobile Holdings |
| Chengdu PUTIAN Telec |
Geely Automobile and Chengdu PUTIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Chengdu PUTIAN
The main advantage of trading using opposite Geely Automobile and Chengdu PUTIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Chengdu PUTIAN 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 Chengdu PUTIAN will offset losses from the drop in Chengdu PUTIAN'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 |
| Chengdu PUTIAN vs. AOYAMA TRADING | Chengdu PUTIAN vs. Virtus Investment Partners | Chengdu PUTIAN vs. ZURICH INSURANCE GROUP | Chengdu PUTIAN vs. Japan Post Insurance |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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