Correlation Between Geely Automobile and Hitachi Construction
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Hitachi Construction 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 Hitachi Construction 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 Hitachi Construction Machinery, you can compare the effects of market volatilities on Geely Automobile and Hitachi Construction 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 Hitachi Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Hitachi Construction.
Diversification Opportunities for Geely Automobile and Hitachi Construction
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Geely and Hitachi is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Hitachi Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitachi Construction 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 Hitachi Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitachi Construction has no effect on the direction of Geely Automobile i.e., Geely Automobile and Hitachi Construction go up and down completely randomly.
Pair Corralation between Geely Automobile and Hitachi Construction
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 1.4 times more return on investment than Hitachi Construction. However, Geely Automobile is 1.4 times more volatile than Hitachi Construction Machinery. It trades about 0.05 of its potential returns per unit of risk. Hitachi Construction Machinery is currently generating about 0.01 per unit of risk. If you would invest 97.00 in Geely Automobile Holdings on September 3, 2024 and sell it today you would earn a total of 70.00 from holding Geely Automobile Holdings or generate 72.16% 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. Hitachi Construction Machinery
Performance |
| Timeline |
| Geely Automobile Holdings |
| Hitachi Construction |
Geely Automobile and Hitachi Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Hitachi Construction
The main advantage of trading using opposite Geely Automobile and Hitachi Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Hitachi Construction 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 Hitachi Construction will offset losses from the drop in Hitachi Construction's long position.| Geely Automobile vs. Tesla Inc | Geely Automobile vs. Toyota Motor | Geely Automobile vs. BYD Company Limited | Geely Automobile vs. Superior Plus Corp |
| Hitachi Construction vs. REVO INSURANCE SPA | Hitachi Construction vs. TFS FINANCIAL | Hitachi Construction vs. Cars Inc | Hitachi Construction vs. Geely Automobile 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |