Correlation Between GEELY AUTOMOBILE and Hua Hong
Can any of the company-specific risk be diversified away by investing in both GEELY AUTOMOBILE and Hua Hong 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 Hua Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEELY AUTOMOBILE and Hua Hong Semiconductor, you can compare the effects of market volatilities on GEELY AUTOMOBILE and Hua Hong 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 Hua Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEELY AUTOMOBILE and Hua Hong.
Diversification Opportunities for GEELY AUTOMOBILE and Hua Hong
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between GEELY and Hua is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding GEELY AUTOMOBILE and Hua Hong Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hua Hong Semiconductor 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 Hua Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hua Hong Semiconductor has no effect on the direction of GEELY AUTOMOBILE i.e., GEELY AUTOMOBILE and Hua Hong go up and down completely randomly.
Pair Corralation between GEELY AUTOMOBILE and Hua Hong
Assuming the 90 days trading horizon GEELY AUTOMOBILE is expected to under-perform the Hua Hong. But the stock apears to be less risky and, when comparing its historical volatility, GEELY AUTOMOBILE is 2.16 times less risky than Hua Hong. The stock trades about -0.08 of its potential returns per unit of risk. The Hua Hong Semiconductor is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 262.00 in Hua Hong Semiconductor on October 23, 2024 and sell it today you would earn a total of 30.00 from holding Hua Hong Semiconductor or generate 11.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
GEELY AUTOMOBILE vs. Hua Hong Semiconductor
Performance |
| Timeline |
| GEELY AUTOMOBILE |
| Hua Hong Semiconductor |
GEELY AUTOMOBILE and Hua Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEELY AUTOMOBILE and Hua Hong
The main advantage of trading using opposite GEELY AUTOMOBILE and Hua Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEELY AUTOMOBILE position performs unexpectedly, Hua Hong 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 Hua Hong will offset losses from the drop in Hua Hong's long position.| GEELY AUTOMOBILE vs. Dalata Hotel Group | GEELY AUTOMOBILE vs. ZhongAn Online P | GEELY AUTOMOBILE vs. GungHo Online Entertainment | GEELY AUTOMOBILE vs. Summit Hotel Properties |
| Hua Hong vs. WillScot Mobile Mini | Hua Hong vs. PLAYWAY SA ZY 10 | Hua Hong vs. GEELY AUTOMOBILE | Hua Hong vs. PLAY2CHILL SA ZY |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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