Correlation Between Geely Automobile and Tri Pointe
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Tri Pointe 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 Tri Pointe 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 Tri Pointe Homes, you can compare the effects of market volatilities on Geely Automobile and Tri Pointe 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 Tri Pointe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Tri Pointe.
Diversification Opportunities for Geely Automobile and Tri Pointe
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Geely and Tri is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Tri Pointe Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tri Pointe Homes 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 Tri Pointe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tri Pointe Homes has no effect on the direction of Geely Automobile i.e., Geely Automobile and Tri Pointe go up and down completely randomly.
Pair Corralation between Geely Automobile and Tri Pointe
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 1.39 times more return on investment than Tri Pointe. However, Geely Automobile is 1.39 times more volatile than Tri Pointe Homes. It trades about 0.14 of its potential returns per unit of risk. Tri Pointe Homes is currently generating about 0.06 per unit of risk. If you would invest 75.00 in Geely Automobile Holdings on September 12, 2024 and sell it today you would earn a total of 118.00 from holding Geely Automobile Holdings or generate 157.33% 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. Tri Pointe Homes
Performance |
| Timeline |
| Geely Automobile Holdings |
| Tri Pointe Homes |
Geely Automobile and Tri Pointe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Tri Pointe
The main advantage of trading using opposite Geely Automobile and Tri Pointe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Tri Pointe 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 Tri Pointe will offset losses from the drop in Tri Pointe's long position.| Geely Automobile vs. BYD Company Limited | Geely Automobile vs. MERCEDES BENZ GRP ADR14 | Geely Automobile vs. Superior Plus Corp | Geely Automobile vs. SIVERS SEMICONDUCTORS AB |
| Tri Pointe vs. Lennar | Tri Pointe vs. Sekisui Chemical Co | Tri Pointe vs. Superior Plus Corp | Tri Pointe vs. SIVERS SEMICONDUCTORS AB |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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