Correlation Between Geely Automobile and SLR Investment
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and SLR Investment 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 SLR Investment 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 SLR Investment Corp, you can compare the effects of market volatilities on Geely Automobile and SLR Investment 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 SLR Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and SLR Investment.
Diversification Opportunities for Geely Automobile and SLR Investment
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Geely and SLR is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and SLR Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLR Investment Corp 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 SLR Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLR Investment Corp has no effect on the direction of Geely Automobile i.e., Geely Automobile and SLR Investment go up and down completely randomly.
Pair Corralation between Geely Automobile and SLR Investment
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 2.28 times more return on investment than SLR Investment. However, Geely Automobile is 2.28 times more volatile than SLR Investment Corp. It trades about 0.05 of its potential returns per unit of risk. SLR Investment Corp is currently generating about 0.06 per unit of risk. If you would invest 97.00 in Geely Automobile Holdings on September 3, 2024 and sell it today you would earn a total of 70.00 from holding Geely Automobile Holdings or generate 72.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. SLR Investment Corp
Performance |
| Timeline |
| Geely Automobile Holdings |
| SLR Investment Corp |
Geely Automobile and SLR Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and SLR Investment
The main advantage of trading using opposite Geely Automobile and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, SLR Investment 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 SLR Investment will offset losses from the drop in SLR Investment's long position.| Geely Automobile vs. Tesla Inc | Geely Automobile vs. Toyota Motor | Geely Automobile vs. BYD Company Limited | Geely Automobile vs. Superior Plus Corp |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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