Correlation Between GEELY AUTOMOBILE and AXWAY SOFTWARE
Can any of the company-specific risk be diversified away by investing in both GEELY AUTOMOBILE and AXWAY SOFTWARE 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 AXWAY SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEELY AUTOMOBILE and AXWAY SOFTWARE EO, you can compare the effects of market volatilities on GEELY AUTOMOBILE and AXWAY SOFTWARE 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 AXWAY SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEELY AUTOMOBILE and AXWAY SOFTWARE.
Diversification Opportunities for GEELY AUTOMOBILE and AXWAY SOFTWARE
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GEELY and AXWAY is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding GEELY AUTOMOBILE and AXWAY SOFTWARE EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXWAY SOFTWARE EO 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 AXWAY SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXWAY SOFTWARE EO has no effect on the direction of GEELY AUTOMOBILE i.e., GEELY AUTOMOBILE and AXWAY SOFTWARE go up and down completely randomly.
Pair Corralation between GEELY AUTOMOBILE and AXWAY SOFTWARE
Assuming the 90 days trading horizon GEELY AUTOMOBILE is expected to generate 1.4 times more return on investment than AXWAY SOFTWARE. However, GEELY AUTOMOBILE is 1.4 times more volatile than AXWAY SOFTWARE EO. It trades about 0.12 of its potential returns per unit of risk. AXWAY SOFTWARE EO is currently generating about 0.03 per unit of risk. If you would invest 110.00 in GEELY AUTOMOBILE on October 17, 2024 and sell it today you would earn a total of 64.00 from holding GEELY AUTOMOBILE or generate 58.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.32% |
| Values | Daily Returns |
GEELY AUTOMOBILE vs. AXWAY SOFTWARE EO
Performance |
| Timeline |
| GEELY AUTOMOBILE |
| AXWAY SOFTWARE EO |
GEELY AUTOMOBILE and AXWAY SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEELY AUTOMOBILE and AXWAY SOFTWARE
The main advantage of trading using opposite GEELY AUTOMOBILE and AXWAY SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEELY AUTOMOBILE position performs unexpectedly, AXWAY SOFTWARE 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 AXWAY SOFTWARE will offset losses from the drop in AXWAY SOFTWARE's long position.| GEELY AUTOMOBILE vs. WESANA HEALTH HOLD | GEELY AUTOMOBILE vs. HEALTHSTREAM | GEELY AUTOMOBILE vs. CarsalesCom | GEELY AUTOMOBILE vs. Cardinal Health |
| AXWAY SOFTWARE vs. CDL INVESTMENT | AXWAY SOFTWARE vs. GEELY AUTOMOBILE | AXWAY SOFTWARE vs. Zoom Video Communications | AXWAY SOFTWARE vs. SLR Investment Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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