Correlation Between Geely Automobile and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and PARKEN Sport 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 PARKEN Sport 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 PARKEN Sport Entertainment, you can compare the effects of market volatilities on Geely Automobile and PARKEN Sport 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 PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and PARKEN Sport.
Diversification Opportunities for Geely Automobile and PARKEN Sport
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Geely and PARKEN is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta 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 PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of Geely Automobile i.e., Geely Automobile and PARKEN Sport go up and down completely randomly.
Pair Corralation between Geely Automobile and PARKEN Sport
Assuming the 90 days horizon Geely Automobile Holdings is expected to under-perform the PARKEN Sport. In addition to that, Geely Automobile is 2.19 times more volatile than PARKEN Sport Entertainment. It trades about -0.02 of its total potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about 0.0 per unit of volatility. If you would invest 1,615 in PARKEN Sport Entertainment on August 25, 2024 and sell it today you would lose (5.00) from holding PARKEN Sport Entertainment or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. PARKEN Sport Entertainment
Performance |
| Timeline |
| Geely Automobile Holdings |
| PARKEN Sport Enterta |
Geely Automobile and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and PARKEN Sport
The main advantage of trading using opposite Geely Automobile and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport's long position.| Geely Automobile vs. Tesla Inc | Geely Automobile vs. BYD Company Limited | Geely Automobile vs. VOLKSWAGEN AG VZ | Geely Automobile vs. Superior Plus Corp |
| PARKEN Sport vs. Enter Air SA | PARKEN Sport vs. IMPERIAL TOBACCO | PARKEN Sport vs. Geely Automobile Holdings | PARKEN Sport vs. Alaska Air Group |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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