Correlation Between GEELY AUTOMOBILE and IDP EDUCATION
Can any of the company-specific risk be diversified away by investing in both GEELY AUTOMOBILE and IDP EDUCATION 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 IDP EDUCATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEELY AUTOMOBILE and IDP EDUCATION LTD, you can compare the effects of market volatilities on GEELY AUTOMOBILE and IDP EDUCATION 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 IDP EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEELY AUTOMOBILE and IDP EDUCATION.
Diversification Opportunities for GEELY AUTOMOBILE and IDP EDUCATION
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GEELY and IDP is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding GEELY AUTOMOBILE and IDP EDUCATION LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDP EDUCATION LTD 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 are associated (or correlated) with IDP EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDP EDUCATION LTD has no effect on the direction of GEELY AUTOMOBILE i.e., GEELY AUTOMOBILE and IDP EDUCATION go up and down completely randomly.
Pair Corralation between GEELY AUTOMOBILE and IDP EDUCATION
Assuming the 90 days trading horizon GEELY AUTOMOBILE is expected to generate 0.49 times more return on investment than IDP EDUCATION. However, GEELY AUTOMOBILE is 2.06 times less risky than IDP EDUCATION. It trades about 0.09 of its potential returns per unit of risk. IDP EDUCATION LTD is currently generating about 0.03 per unit of risk. If you would invest 166.00 in GEELY AUTOMOBILE on October 19, 2024 and sell it today you would earn a total of 12.00 from holding GEELY AUTOMOBILE or generate 7.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GEELY AUTOMOBILE vs. IDP EDUCATION LTD
Performance |
| Timeline |
| GEELY AUTOMOBILE |
| IDP EDUCATION LTD |
GEELY AUTOMOBILE and IDP EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEELY AUTOMOBILE and IDP EDUCATION
The main advantage of trading using opposite GEELY AUTOMOBILE and IDP EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEELY AUTOMOBILE position performs unexpectedly, IDP EDUCATION 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 IDP EDUCATION will offset losses from the drop in IDP EDUCATION's long position.| GEELY AUTOMOBILE vs. USU Software AG | GEELY AUTOMOBILE vs. Monument Mining Limited | GEELY AUTOMOBILE vs. MCEWEN MINING INC | GEELY AUTOMOBILE vs. FORMPIPE SOFTWARE AB |
| IDP EDUCATION vs. GEELY AUTOMOBILE | IDP EDUCATION vs. Summit Hotel Properties | IDP EDUCATION vs. Insurance Australia Group | IDP EDUCATION vs. Safety Insurance Group |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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