Correlation Between Geely Automobile and NORWEGIAN AIR
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and NORWEGIAN AIR 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 NORWEGIAN AIR 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 NORWEGIAN AIR SHUT, you can compare the effects of market volatilities on Geely Automobile and NORWEGIAN AIR 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 NORWEGIAN AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and NORWEGIAN AIR.
Diversification Opportunities for Geely Automobile and NORWEGIAN AIR
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Geely and NORWEGIAN is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and NORWEGIAN AIR SHUT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORWEGIAN AIR SHUT 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 NORWEGIAN AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORWEGIAN AIR SHUT has no effect on the direction of Geely Automobile i.e., Geely Automobile and NORWEGIAN AIR go up and down completely randomly.
Pair Corralation between Geely Automobile and NORWEGIAN AIR
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 0.86 times more return on investment than NORWEGIAN AIR. However, Geely Automobile Holdings is 1.16 times less risky than NORWEGIAN AIR. It trades about 0.08 of its potential returns per unit of risk. NORWEGIAN AIR SHUT is currently generating about 0.01 per unit of risk. If you would invest 90.00 in Geely Automobile Holdings on August 31, 2024 and sell it today you would earn a total of 79.00 from holding Geely Automobile Holdings or generate 87.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Geely Automobile Holdings vs. NORWEGIAN AIR SHUT
Performance |
| Timeline |
| Geely Automobile Holdings |
| NORWEGIAN AIR SHUT |
Geely Automobile and NORWEGIAN AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and NORWEGIAN AIR
The main advantage of trading using opposite Geely Automobile and NORWEGIAN AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, NORWEGIAN AIR 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 NORWEGIAN AIR will offset losses from the drop in NORWEGIAN AIR'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 |
| NORWEGIAN AIR vs. SIVERS SEMICONDUCTORS AB | NORWEGIAN AIR vs. Darden Restaurants | NORWEGIAN AIR vs. Reliance Steel Aluminum | NORWEGIAN AIR vs. Q2M Managementberatung AG |
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 Stocks Directory module to find actively traded stocks across global markets.
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