Correlation Between Geely Automobile and FUJITSU
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and FUJITSU 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 FUJITSU 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 FUJITSU LTD ADR, you can compare the effects of market volatilities on Geely Automobile and FUJITSU 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 FUJITSU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and FUJITSU.
Diversification Opportunities for Geely Automobile and FUJITSU
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Geely and FUJITSU is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and FUJITSU LTD ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUJITSU LTD ADR 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 FUJITSU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUJITSU LTD ADR has no effect on the direction of Geely Automobile i.e., Geely Automobile and FUJITSU go up and down completely randomly.
Pair Corralation between Geely Automobile and FUJITSU
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 2.02 times more return on investment than FUJITSU. However, Geely Automobile is 2.02 times more volatile than FUJITSU LTD ADR. It trades about 0.17 of its potential returns per unit of risk. FUJITSU LTD ADR is currently generating about 0.09 per unit of risk. If you would invest 170.00 in Geely Automobile Holdings on September 13, 2024 and sell it today you would earn a total of 21.00 from holding Geely Automobile Holdings or generate 12.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. FUJITSU LTD ADR
Performance |
| Timeline |
| Geely Automobile Holdings |
| FUJITSU LTD ADR |
Geely Automobile and FUJITSU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and FUJITSU
The main advantage of trading using opposite Geely Automobile and FUJITSU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, FUJITSU 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 FUJITSU will offset losses from the drop in FUJITSU's long position.| Geely Automobile vs. Focus Home Interactive | Geely Automobile vs. Haier Smart Home | Geely Automobile vs. Haverty Furniture Companies | Geely Automobile vs. Broadridge Financial Solutions |
| FUJITSU vs. China Communications Services | FUJITSU vs. CITIC Telecom International | FUJITSU vs. Jacquet Metal Service | FUJITSU vs. Consolidated Communications Holdings |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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