Correlation Between Geely Automobile and ScanSource
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and ScanSource 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 ScanSource 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 ScanSource, you can compare the effects of market volatilities on Geely Automobile and ScanSource 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 ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and ScanSource.
Diversification Opportunities for Geely Automobile and ScanSource
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Geely and ScanSource is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource 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 ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of Geely Automobile i.e., Geely Automobile and ScanSource go up and down completely randomly.
Pair Corralation between Geely Automobile and ScanSource
Assuming the 90 days horizon Geely Automobile Holdings is expected to under-perform the ScanSource. In addition to that, Geely Automobile is 1.19 times more volatile than ScanSource. It trades about -0.22 of its total potential returns per unit of risk. ScanSource is currently generating about -0.14 per unit of volatility. If you would invest 3,480 in ScanSource on December 30, 2024 and sell it today you would lose (220.00) from holding ScanSource or give up 6.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. ScanSource
Performance |
| Timeline |
| Geely Automobile Holdings |
| ScanSource |
Geely Automobile and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and ScanSource
The main advantage of trading using opposite Geely Automobile and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, ScanSource 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 ScanSource will offset losses from the drop in ScanSource's long position.| Geely Automobile vs. Broadridge Financial Solutions | ||
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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