Correlation Between GEELY AUTOMOBILE and TITAN MACHINERY
Can any of the company-specific risk be diversified away by investing in both GEELY AUTOMOBILE and TITAN MACHINERY 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 TITAN MACHINERY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEELY AUTOMOBILE and TITAN MACHINERY, you can compare the effects of market volatilities on GEELY AUTOMOBILE and TITAN MACHINERY 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 TITAN MACHINERY. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEELY AUTOMOBILE and TITAN MACHINERY.
Diversification Opportunities for GEELY AUTOMOBILE and TITAN MACHINERY
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GEELY and TITAN is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding GEELY AUTOMOBILE and TITAN MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TITAN MACHINERY 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 TITAN MACHINERY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TITAN MACHINERY has no effect on the direction of GEELY AUTOMOBILE i.e., GEELY AUTOMOBILE and TITAN MACHINERY go up and down completely randomly.
Pair Corralation between GEELY AUTOMOBILE and TITAN MACHINERY
Assuming the 90 days trading horizon GEELY AUTOMOBILE is expected to generate 0.82 times more return on investment than TITAN MACHINERY. However, GEELY AUTOMOBILE is 1.22 times less risky than TITAN MACHINERY. It trades about 0.06 of its potential returns per unit of risk. TITAN MACHINERY is currently generating about -0.04 per unit of risk. If you would invest 97.00 in GEELY AUTOMOBILE on September 4, 2024 and sell it today you would earn a total of 79.00 from holding GEELY AUTOMOBILE or generate 81.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GEELY AUTOMOBILE vs. TITAN MACHINERY
Performance |
| Timeline |
| GEELY AUTOMOBILE |
| TITAN MACHINERY |
GEELY AUTOMOBILE and TITAN MACHINERY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEELY AUTOMOBILE and TITAN MACHINERY
The main advantage of trading using opposite GEELY AUTOMOBILE and TITAN MACHINERY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEELY AUTOMOBILE position performs unexpectedly, TITAN MACHINERY 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 TITAN MACHINERY will offset losses from the drop in TITAN MACHINERY's long position.| GEELY AUTOMOBILE vs. Transport International Holdings | GEELY AUTOMOBILE vs. BROADWIND ENRGY | GEELY AUTOMOBILE vs. SEKISUI CHEMICAL | GEELY AUTOMOBILE vs. Gaztransport Technigaz SA |
| TITAN MACHINERY vs. TOTAL GABON | TITAN MACHINERY vs. Walgreens Boots Alliance | TITAN MACHINERY vs. Peak Resources Limited |
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 Stocks Directory module to find actively traded stocks across global markets.
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