Correlation Between Geely Automobile and Nel ASA
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Nel ASA 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 Nel ASA 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 Nel ASA, you can compare the effects of market volatilities on Geely Automobile and Nel ASA 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 Nel ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Nel ASA.
Diversification Opportunities for Geely Automobile and Nel ASA
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Geely and Nel is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Nel ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nel ASA 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 Nel ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nel ASA has no effect on the direction of Geely Automobile i.e., Geely Automobile and Nel ASA go up and down completely randomly.
Pair Corralation between Geely Automobile and Nel ASA
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 1.13 times more return on investment than Nel ASA. However, Geely Automobile is 1.13 times more volatile than Nel ASA. It trades about 0.21 of its potential returns per unit of risk. Nel ASA is currently generating about 0.02 per unit of risk. If you would invest 177.00 in Geely Automobile Holdings on November 19, 2024 and sell it today you would earn a total of 32.00 from holding Geely Automobile Holdings or generate 18.08% 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. Nel ASA
Performance |
| Timeline |
| Geely Automobile Holdings |
| Nel ASA |
Geely Automobile and Nel ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Nel ASA
The main advantage of trading using opposite Geely Automobile and Nel ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Nel ASA 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 Nel ASA will offset losses from the drop in Nel ASA's long position.| Geely Automobile vs. Wayside Technology Group | Geely Automobile vs. USWE SPORTS AB | Geely Automobile vs. SPORTING | Geely Automobile vs. Air Transport Services |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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