Correlation Between Geely Automobile and PENN NATL
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and PENN NATL 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 PENN NATL 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 PENN NATL GAMING, you can compare the effects of market volatilities on Geely Automobile and PENN NATL 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 PENN NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and PENN NATL.
Diversification Opportunities for Geely Automobile and PENN NATL
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Geely and PENN is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and PENN NATL GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN NATL GAMING 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 PENN NATL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN NATL GAMING has no effect on the direction of Geely Automobile i.e., Geely Automobile and PENN NATL go up and down completely randomly.
Pair Corralation between Geely Automobile and PENN NATL
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 1.3 times more return on investment than PENN NATL. However, Geely Automobile is 1.3 times more volatile than PENN NATL GAMING. It trades about 0.17 of its potential returns per unit of risk. PENN NATL GAMING is currently generating about 0.08 per unit of risk. If you would invest 102.00 in Geely Automobile Holdings on November 2, 2024 and sell it today you would earn a total of 75.00 from holding Geely Automobile Holdings or generate 73.53% 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. PENN NATL GAMING
Performance |
| Timeline |
| Geely Automobile Holdings |
| PENN NATL GAMING |
Geely Automobile and PENN NATL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and PENN NATL
The main advantage of trading using opposite Geely Automobile and PENN NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, PENN NATL 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 PENN NATL will offset losses from the drop in PENN NATL's long position.| Geely Automobile vs. Telecom Argentina SA | Geely Automobile vs. Highlight Communications AG | Geely Automobile vs. CanSino Biologics | Geely Automobile vs. CENTURIA OFFICE REIT |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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