Correlation Between Geely Automobile and CVW CLEANTECH
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and CVW CLEANTECH 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 CVW CLEANTECH 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 CVW CLEANTECH INC, you can compare the effects of market volatilities on Geely Automobile and CVW CLEANTECH 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 CVW CLEANTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and CVW CLEANTECH.
Diversification Opportunities for Geely Automobile and CVW CLEANTECH
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Geely and CVW is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and CVW CLEANTECH INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVW CLEANTECH INC 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 CVW CLEANTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVW CLEANTECH INC has no effect on the direction of Geely Automobile i.e., Geely Automobile and CVW CLEANTECH go up and down completely randomly.
Pair Corralation between Geely Automobile and CVW CLEANTECH
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 0.58 times more return on investment than CVW CLEANTECH. However, Geely Automobile Holdings is 1.72 times less risky than CVW CLEANTECH. It trades about 0.06 of its potential returns per unit of risk. CVW CLEANTECH INC is currently generating about 0.01 per unit of risk. If you would invest 94.00 in Geely Automobile Holdings on September 12, 2024 and sell it today you would earn a total of 99.00 from holding Geely Automobile Holdings or generate 105.32% 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. CVW CLEANTECH INC
Performance |
| Timeline |
| Geely Automobile Holdings |
| CVW CLEANTECH INC |
Geely Automobile and CVW CLEANTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and CVW CLEANTECH
The main advantage of trading using opposite Geely Automobile and CVW CLEANTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, CVW CLEANTECH 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 CVW CLEANTECH will offset losses from the drop in CVW CLEANTECH'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 |
| CVW CLEANTECH vs. American Lithium Corp | CVW CLEANTECH vs. ADRIATIC METALS LS 013355 | CVW CLEANTECH vs. Superior Plus Corp | CVW CLEANTECH 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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