Correlation Between Geely Automobile and COMMERCIAL VEHICLE
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE, you can compare the effects of market volatilities on Geely Automobile and COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and COMMERCIAL VEHICLE.
Diversification Opportunities for Geely Automobile and COMMERCIAL VEHICLE
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Geely and COMMERCIAL is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and COMMERCIAL VEHICLE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMMERCIAL VEHICLE has no effect on the direction of Geely Automobile i.e., Geely Automobile and COMMERCIAL VEHICLE go up and down completely randomly.
Pair Corralation between Geely Automobile and COMMERCIAL VEHICLE
Assuming the 90 days horizon Geely Automobile Holdings is expected to under-perform the COMMERCIAL VEHICLE. But the stock apears to be less risky and, when comparing its historical volatility, Geely Automobile Holdings is 2.36 times less risky than COMMERCIAL VEHICLE. The stock trades about -0.19 of its potential returns per unit of risk. The COMMERCIAL VEHICLE is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 286.00 in COMMERCIAL VEHICLE on August 28, 2024 and sell it today you would lose (42.00) from holding COMMERCIAL VEHICLE or give up 14.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. COMMERCIAL VEHICLE
Performance |
| Timeline |
| Geely Automobile Holdings |
| COMMERCIAL VEHICLE |
Geely Automobile and COMMERCIAL VEHICLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and COMMERCIAL VEHICLE
The main advantage of trading using opposite Geely Automobile and COMMERCIAL VEHICLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE will offset losses from the drop in COMMERCIAL VEHICLE's long position.| Geely Automobile vs. Superior Plus Corp | Geely Automobile vs. NMI Holdings | Geely Automobile vs. Origin Agritech | Geely Automobile vs. SIVERS SEMICONDUCTORS AB |
| COMMERCIAL VEHICLE vs. KENNAMETAL INC | COMMERCIAL VEHICLE vs. Evolution Mining Limited | COMMERCIAL VEHICLE vs. Harmony Gold Mining | COMMERCIAL VEHICLE vs. G III Apparel 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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