Correlation Between Geely Automobile and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Jacquet Metal 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 Jacquet Metal 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 Jacquet Metal Service, you can compare the effects of market volatilities on Geely Automobile and Jacquet Metal 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 Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Jacquet Metal.
Diversification Opportunities for Geely Automobile and Jacquet Metal
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Geely and Jacquet is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service 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 Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of Geely Automobile i.e., Geely Automobile and Jacquet Metal go up and down completely randomly.
Pair Corralation between Geely Automobile and Jacquet Metal
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 2.26 times more return on investment than Jacquet Metal. However, Geely Automobile is 2.26 times more volatile than Jacquet Metal Service. It trades about 0.01 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about -0.17 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Jacquet Metal Service
Performance |
| Timeline |
| Geely Automobile Holdings |
| Jacquet Metal Service |
Geely Automobile and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Jacquet Metal
The main advantage of trading using opposite Geely Automobile and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Jacquet Metal 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 Jacquet Metal will offset losses from the drop in Jacquet Metal'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 |
| Jacquet Metal vs. Tsingtao Brewery | Jacquet Metal vs. BJs Restaurants | Jacquet Metal vs. GungHo Online Entertainment | Jacquet Metal vs. Thai Beverage Public |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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