Correlation Between Geely Automobile and Minerals Technologies
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Minerals Technologies 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 Minerals Technologies 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 Minerals Technologies, you can compare the effects of market volatilities on Geely Automobile and Minerals Technologies 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 Minerals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Minerals Technologies.
Diversification Opportunities for Geely Automobile and Minerals Technologies
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Geely and Minerals is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Minerals Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerals Technologies 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 Minerals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerals Technologies has no effect on the direction of Geely Automobile i.e., Geely Automobile and Minerals Technologies go up and down completely randomly.
Pair Corralation between Geely Automobile and Minerals Technologies
Assuming the 90 days horizon Geely Automobile Holdings is expected to under-perform the Minerals Technologies. In addition to that, Geely Automobile is 1.01 times more volatile than Minerals Technologies. It trades about -0.28 of its total potential returns per unit of risk. Minerals Technologies is currently generating about -0.19 per unit of volatility. If you would invest 7,300 in Minerals Technologies on October 16, 2024 and sell it today you would lose (350.00) from holding Minerals Technologies or give up 4.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Minerals Technologies
Performance |
| Timeline |
| Geely Automobile Holdings |
| Minerals Technologies |
Geely Automobile and Minerals Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Minerals Technologies
The main advantage of trading using opposite Geely Automobile and Minerals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Minerals Technologies 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 Minerals Technologies will offset losses from the drop in Minerals Technologies' long position.| Geely Automobile vs. FORMPIPE SOFTWARE AB | Geely Automobile vs. AOI Electronics Co | Geely Automobile vs. Take Two Interactive Software | Geely Automobile vs. CyberArk Software |
| Minerals Technologies vs. Renesas Electronics | Minerals Technologies vs. AOI Electronics Co | Minerals Technologies vs. KIMBALL ELECTRONICS | Minerals Technologies vs. Entravision Communications |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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