Correlation Between Geely Automobile and THUNDELARRA
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and THUNDELARRA 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 THUNDELARRA 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 THUNDELARRA, you can compare the effects of market volatilities on Geely Automobile and THUNDELARRA 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 THUNDELARRA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and THUNDELARRA.
Diversification Opportunities for Geely Automobile and THUNDELARRA
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Geely and THUNDELARRA is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and THUNDELARRA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THUNDELARRA 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 THUNDELARRA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THUNDELARRA has no effect on the direction of Geely Automobile i.e., Geely Automobile and THUNDELARRA go up and down completely randomly.
Pair Corralation between Geely Automobile and THUNDELARRA
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 0.72 times more return on investment than THUNDELARRA. However, Geely Automobile Holdings is 1.39 times less risky than THUNDELARRA. It trades about 0.19 of its potential returns per unit of risk. THUNDELARRA is currently generating about -0.19 per unit of risk. If you would invest 170.00 in Geely Automobile Holdings on September 13, 2024 and sell it today you would earn a total of 24.00 from holding Geely Automobile Holdings or generate 14.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Geely Automobile Holdings vs. THUNDELARRA
Performance |
| Timeline |
| Geely Automobile Holdings |
| THUNDELARRA |
Geely Automobile and THUNDELARRA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and THUNDELARRA
The main advantage of trading using opposite Geely Automobile and THUNDELARRA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, THUNDELARRA 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 THUNDELARRA will offset losses from the drop in THUNDELARRA'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 |
| THUNDELARRA vs. Major Drilling Group | THUNDELARRA vs. BORR DRILLING NEW | THUNDELARRA vs. GungHo Online Entertainment | THUNDELARRA vs. Salesforce |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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