Correlation Between Geely Automobile and Pembina Pipeline
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Pembina Pipeline 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 Pembina Pipeline 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 Pembina Pipeline Corp, you can compare the effects of market volatilities on Geely Automobile and Pembina Pipeline 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 Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Pembina Pipeline.
Diversification Opportunities for Geely Automobile and Pembina Pipeline
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Geely and Pembina is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Pembina Pipeline Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pembina Pipeline Corp 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 Pembina Pipeline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pembina Pipeline Corp has no effect on the direction of Geely Automobile i.e., Geely Automobile and Pembina Pipeline go up and down completely randomly.
Pair Corralation between Geely Automobile and Pembina Pipeline
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 1.98 times more return on investment than Pembina Pipeline. However, Geely Automobile is 1.98 times more volatile than Pembina Pipeline Corp. It trades about 0.06 of its potential returns per unit of risk. Pembina Pipeline Corp is currently generating about 0.0 per unit of risk. If you would invest 170.00 in Geely Automobile Holdings on September 5, 2024 and sell it today you would earn a total of 5.00 from holding Geely Automobile Holdings or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Pembina Pipeline Corp
Performance |
| Timeline |
| Geely Automobile Holdings |
| Pembina Pipeline Corp |
Geely Automobile and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Pembina Pipeline
The main advantage of trading using opposite Geely Automobile and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Pembina Pipeline 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 Pembina Pipeline will offset losses from the drop in Pembina Pipeline's long position.| Geely Automobile vs. Tesla Inc | Geely Automobile vs. BYD Company Limited | Geely Automobile vs. Superior Plus Corp | Geely Automobile vs. NMI Holdings |
| Pembina Pipeline vs. Austevoll Seafood ASA | Pembina Pipeline vs. CarsalesCom | Pembina Pipeline vs. Geely Automobile Holdings | Pembina Pipeline vs. INTER CARS 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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