Correlation Between Geely Automobile and United Airlines
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and United Airlines 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 United Airlines 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 United Airlines Holdings, you can compare the effects of market volatilities on Geely Automobile and United Airlines 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 United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and United Airlines.
Diversification Opportunities for Geely Automobile and United Airlines
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Geely and United is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and United Airlines Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Airlines Holdings 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 United Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Airlines Holdings has no effect on the direction of Geely Automobile i.e., Geely Automobile and United Airlines go up and down completely randomly.
Pair Corralation between Geely Automobile and United Airlines
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 0.93 times more return on investment than United Airlines. However, Geely Automobile Holdings is 1.08 times less risky than United Airlines. It trades about 0.08 of its potential returns per unit of risk. United Airlines Holdings is currently generating about -0.04 per unit of risk. If you would invest 170.00 in Geely Automobile Holdings on December 12, 2024 and sell it today you would earn a total of 31.00 from holding Geely Automobile Holdings or generate 18.24% 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. United Airlines Holdings
Performance |
| Timeline |
| Geely Automobile Holdings |
| United Airlines Holdings |
Geely Automobile and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and United Airlines
The main advantage of trading using opposite Geely Automobile and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, United Airlines 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 United Airlines will offset losses from the drop in United Airlines' long position.| Geely Automobile vs. Tesla Inc | ||
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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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