Correlation Between Geely Automobile and FORWARD AIR
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and FORWARD AIR 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 FORWARD AIR 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 FORWARD AIR P, you can compare the effects of market volatilities on Geely Automobile and FORWARD AIR 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 FORWARD AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and FORWARD AIR.
Diversification Opportunities for Geely Automobile and FORWARD AIR
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Geely and FORWARD is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and FORWARD AIR P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORWARD AIR P 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 FORWARD AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORWARD AIR P has no effect on the direction of Geely Automobile i.e., Geely Automobile and FORWARD AIR go up and down completely randomly.
Pair Corralation between Geely Automobile and FORWARD AIR
Assuming the 90 days horizon Geely Automobile Holdings is expected to under-perform the FORWARD AIR. But the stock apears to be less risky and, when comparing its historical volatility, Geely Automobile Holdings is 2.3 times less risky than FORWARD AIR. The stock trades about -0.17 of its potential returns per unit of risk. The FORWARD AIR P is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,380 in FORWARD AIR P on August 29, 2024 and sell it today you would lose (20.00) from holding FORWARD AIR P or give up 0.59% 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. FORWARD AIR P
Performance |
| Timeline |
| Geely Automobile Holdings |
| FORWARD AIR P |
Geely Automobile and FORWARD AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and FORWARD AIR
The main advantage of trading using opposite Geely Automobile and FORWARD AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, FORWARD AIR 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 FORWARD AIR will offset losses from the drop in FORWARD AIR's long position.| Geely Automobile vs. STORE ELECTRONIC | Geely Automobile vs. BYD ELECTRONIC | Geely Automobile vs. Arrow Electronics | Geely Automobile vs. PennantPark Investment |
| FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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