Correlation Between Geely Automobile and LOANDEPOT INC
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and LOANDEPOT INC 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 LOANDEPOT INC 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 LOANDEPOT INC A, you can compare the effects of market volatilities on Geely Automobile and LOANDEPOT INC 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 LOANDEPOT INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and LOANDEPOT INC.
Diversification Opportunities for Geely Automobile and LOANDEPOT INC
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Geely and LOANDEPOT is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and LOANDEPOT INC A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOANDEPOT INC A 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 LOANDEPOT INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOANDEPOT INC A has no effect on the direction of Geely Automobile i.e., Geely Automobile and LOANDEPOT INC go up and down completely randomly.
Pair Corralation between Geely Automobile and LOANDEPOT INC
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 0.58 times more return on investment than LOANDEPOT INC. However, Geely Automobile Holdings is 1.73 times less risky than LOANDEPOT INC. It trades about 0.06 of its potential returns per unit of risk. LOANDEPOT INC A is currently generating about 0.01 per unit of risk. If you would invest 96.00 in Geely Automobile Holdings on October 15, 2024 and sell it today you would earn a total of 76.00 from holding Geely Automobile Holdings or generate 79.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. LOANDEPOT INC A
Performance |
| Timeline |
| Geely Automobile Holdings |
| LOANDEPOT INC A |
Geely Automobile and LOANDEPOT INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and LOANDEPOT INC
The main advantage of trading using opposite Geely Automobile and LOANDEPOT INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, LOANDEPOT INC 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 LOANDEPOT INC will offset losses from the drop in LOANDEPOT INC's long position.| Geely Automobile vs. Austevoll Seafood ASA | Geely Automobile vs. Aristocrat Leisure Limited | Geely Automobile vs. ARISTOCRAT LEISURE | Geely Automobile vs. Ebro Foods SA |
| LOANDEPOT INC vs. SK TELECOM TDADR | LOANDEPOT INC vs. Chunghwa Telecom Co | LOANDEPOT INC vs. Entravision Communications | LOANDEPOT INC vs. Telecom Argentina SA |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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