Correlation Between Geely Automobile and GEAR4MUSIC
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and GEAR4MUSIC 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 GEAR4MUSIC 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 GEAR4MUSIC LS 10, you can compare the effects of market volatilities on Geely Automobile and GEAR4MUSIC 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 GEAR4MUSIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and GEAR4MUSIC.
Diversification Opportunities for Geely Automobile and GEAR4MUSIC
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Geely and GEAR4MUSIC is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and GEAR4MUSIC LS 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEAR4MUSIC LS 10 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 GEAR4MUSIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEAR4MUSIC LS 10 has no effect on the direction of Geely Automobile i.e., Geely Automobile and GEAR4MUSIC go up and down completely randomly.
Pair Corralation between Geely Automobile and GEAR4MUSIC
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 1.41 times more return on investment than GEAR4MUSIC. However, Geely Automobile is 1.41 times more volatile than GEAR4MUSIC LS 10. It trades about 0.01 of its potential returns per unit of risk. GEAR4MUSIC LS 10 is currently generating about -0.01 per unit of risk. If you would invest 170.00 in Geely Automobile Holdings on August 31, 2024 and sell it today you would lose (1.00) from holding Geely Automobile Holdings or give up 0.59% 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. GEAR4MUSIC LS 10
Performance |
| Timeline |
| Geely Automobile Holdings |
| GEAR4MUSIC LS 10 |
Geely Automobile and GEAR4MUSIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and GEAR4MUSIC
The main advantage of trading using opposite Geely Automobile and GEAR4MUSIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, GEAR4MUSIC 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 GEAR4MUSIC will offset losses from the drop in GEAR4MUSIC's long position.| Geely Automobile vs. NORWEGIAN AIR SHUT | Geely Automobile vs. Penta Ocean Construction Co | Geely Automobile vs. DAIRY FARM INTL | Geely Automobile vs. Ryanair Holdings plc |
| GEAR4MUSIC vs. ETFS Coffee ETC | GEAR4MUSIC vs. JAPAN TOBACCO UNSPADR12 | GEAR4MUSIC vs. ScanSource | GEAR4MUSIC vs. Hanison Construction 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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