Correlation Between GEELY AUTOMOBILE and PLAYWAY SA
Can any of the company-specific risk be diversified away by investing in both GEELY AUTOMOBILE and PLAYWAY SA 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 PLAYWAY SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEELY AUTOMOBILE and PLAYWAY SA ZY 10, you can compare the effects of market volatilities on GEELY AUTOMOBILE and PLAYWAY SA 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 PLAYWAY SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEELY AUTOMOBILE and PLAYWAY SA.
Diversification Opportunities for GEELY AUTOMOBILE and PLAYWAY SA
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between GEELY and PLAYWAY is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding GEELY AUTOMOBILE and PLAYWAY SA ZY 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYWAY SA ZY 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 PLAYWAY SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYWAY SA ZY has no effect on the direction of GEELY AUTOMOBILE i.e., GEELY AUTOMOBILE and PLAYWAY SA go up and down completely randomly.
Pair Corralation between GEELY AUTOMOBILE and PLAYWAY SA
Assuming the 90 days trading horizon GEELY AUTOMOBILE is expected to under-perform the PLAYWAY SA. But the stock apears to be less risky and, when comparing its historical volatility, GEELY AUTOMOBILE is 1.43 times less risky than PLAYWAY SA. The stock trades about -0.26 of its potential returns per unit of risk. The PLAYWAY SA ZY 10 is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 6,280 in PLAYWAY SA ZY 10 on October 17, 2024 and sell it today you would earn a total of 700.00 from holding PLAYWAY SA ZY 10 or generate 11.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GEELY AUTOMOBILE vs. PLAYWAY SA ZY 10
Performance |
| Timeline |
| GEELY AUTOMOBILE |
| PLAYWAY SA ZY |
GEELY AUTOMOBILE and PLAYWAY SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEELY AUTOMOBILE and PLAYWAY SA
The main advantage of trading using opposite GEELY AUTOMOBILE and PLAYWAY SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEELY AUTOMOBILE position performs unexpectedly, PLAYWAY SA 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 PLAYWAY SA will offset losses from the drop in PLAYWAY SA's long position.| GEELY AUTOMOBILE vs. WESANA HEALTH HOLD | GEELY AUTOMOBILE vs. HEALTHSTREAM | GEELY AUTOMOBILE vs. CarsalesCom | GEELY AUTOMOBILE vs. Cardinal Health |
| PLAYWAY SA vs. Cairo Communication SpA | PLAYWAY SA vs. MOLSON RS BEVERAGE | PLAYWAY SA vs. GEELY AUTOMOBILE | PLAYWAY SA vs. Singapore Telecommunications 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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