Correlation Between GEELY AUTOMOBILE and ONWARD MEDICAL
Can any of the company-specific risk be diversified away by investing in both GEELY AUTOMOBILE and ONWARD MEDICAL 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 ONWARD MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEELY AUTOMOBILE and ONWARD MEDICAL BV, you can compare the effects of market volatilities on GEELY AUTOMOBILE and ONWARD MEDICAL 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 ONWARD MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEELY AUTOMOBILE and ONWARD MEDICAL.
Diversification Opportunities for GEELY AUTOMOBILE and ONWARD MEDICAL
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GEELY and ONWARD is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding GEELY AUTOMOBILE and ONWARD MEDICAL BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONWARD MEDICAL BV 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 ONWARD MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONWARD MEDICAL BV has no effect on the direction of GEELY AUTOMOBILE i.e., GEELY AUTOMOBILE and ONWARD MEDICAL go up and down completely randomly.
Pair Corralation between GEELY AUTOMOBILE and ONWARD MEDICAL
Assuming the 90 days trading horizon GEELY AUTOMOBILE is expected to under-perform the ONWARD MEDICAL. But the stock apears to be less risky and, when comparing its historical volatility, GEELY AUTOMOBILE is 3.43 times less risky than ONWARD MEDICAL. The stock trades about -0.24 of its potential returns per unit of risk. The ONWARD MEDICAL BV is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 440.00 in ONWARD MEDICAL BV on October 20, 2024 and sell it today you would earn a total of 158.00 from holding ONWARD MEDICAL BV or generate 35.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
GEELY AUTOMOBILE vs. ONWARD MEDICAL BV
Performance |
| Timeline |
| GEELY AUTOMOBILE |
| ONWARD MEDICAL BV |
GEELY AUTOMOBILE and ONWARD MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEELY AUTOMOBILE and ONWARD MEDICAL
The main advantage of trading using opposite GEELY AUTOMOBILE and ONWARD MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEELY AUTOMOBILE position performs unexpectedly, ONWARD MEDICAL 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 ONWARD MEDICAL will offset losses from the drop in ONWARD MEDICAL's long position.| GEELY AUTOMOBILE vs. Citic Telecom International | GEELY AUTOMOBILE vs. Acadia Healthcare | GEELY AUTOMOBILE vs. Darden Restaurants | GEELY AUTOMOBILE vs. SWISS WATER DECAFFCOFFEE |
| ONWARD MEDICAL vs. COVIVIO HOTELS INH | ONWARD MEDICAL vs. PPHE HOTEL GROUP | ONWARD MEDICAL vs. Japan Tobacco | ONWARD MEDICAL vs. Hyatt Hotels |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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