Correlation Between Geely Automobile and OFFICE DEPOT

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Can any of the company-specific risk be diversified away by investing in both Geely Automobile and OFFICE DEPOT 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 OFFICE DEPOT 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 OFFICE DEPOT, you can compare the effects of market volatilities on Geely Automobile and OFFICE DEPOT 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 OFFICE DEPOT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and OFFICE DEPOT.

Diversification Opportunities for Geely Automobile and OFFICE DEPOT

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Geely and OFFICE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and OFFICE DEPOT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFFICE DEPOT 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 OFFICE DEPOT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFFICE DEPOT has no effect on the direction of Geely Automobile i.e., Geely Automobile and OFFICE DEPOT go up and down completely randomly.

Pair Corralation between Geely Automobile and OFFICE DEPOT

If you would invest  170.00  in Geely Automobile Holdings on September 15, 2024 and sell it today you would earn a total of  25.00  from holding Geely Automobile Holdings or generate 14.71% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Geely Automobile Holdings  vs.  OFFICE DEPOT

 Performance 
       Timeline  
Geely Automobile Holdings 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Geely Automobile Holdings are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Geely Automobile reported solid returns over the last few months and may actually be approaching a breakup point.
OFFICE DEPOT 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days OFFICE DEPOT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, OFFICE DEPOT is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Geely Automobile and OFFICE DEPOT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Geely Automobile and OFFICE DEPOT

The main advantage of trading using opposite Geely Automobile and OFFICE DEPOT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, OFFICE DEPOT 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 OFFICE DEPOT will offset losses from the drop in OFFICE DEPOT's long position.
The idea behind Geely Automobile Holdings and OFFICE DEPOT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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