Correlation Between Geely Automobile and Hongkong
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Hongkong 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 Hongkong 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 The Hongkong and, you can compare the effects of market volatilities on Geely Automobile and Hongkong 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 Hongkong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Hongkong.
Diversification Opportunities for Geely Automobile and Hongkong
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Geely and Hongkong is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and The Hongkong and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hongkong 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 Hongkong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hongkong has no effect on the direction of Geely Automobile i.e., Geely Automobile and Hongkong go up and down completely randomly.
Pair Corralation between Geely Automobile and Hongkong
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 1.56 times more return on investment than Hongkong. However, Geely Automobile is 1.56 times more volatile than The Hongkong and. It trades about -0.03 of its potential returns per unit of risk. The Hongkong and is currently generating about -0.2 per unit of risk. If you would invest 179.00 in Geely Automobile Holdings on October 29, 2024 and sell it today you would lose (2.00) from holding Geely Automobile Holdings or give up 1.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. The Hongkong and
Performance |
| Timeline |
| Geely Automobile Holdings |
| The Hongkong |
Geely Automobile and Hongkong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Hongkong
The main advantage of trading using opposite Geely Automobile and Hongkong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Hongkong 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 Hongkong will offset losses from the drop in Hongkong's long position.| Geely Automobile vs. Cars Inc | Geely Automobile vs. DELTA AIR LINES | Geely Automobile vs. CHINA EDUCATION GROUP | Geely Automobile vs. EEDUCATION ALBERT AB |
| Hongkong vs. DICKS Sporting Goods | Hongkong vs. COLUMBIA SPORTSWEAR | Hongkong vs. G III Apparel Group | Hongkong vs. MAG SILVER |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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