Correlation Between GEELY AUTOMOBILE and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both GEELY AUTOMOBILE and WIMFARM 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 WIMFARM 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 WIMFARM SA EO, you can compare the effects of market volatilities on GEELY AUTOMOBILE and WIMFARM 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 WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEELY AUTOMOBILE and WIMFARM SA.
Diversification Opportunities for GEELY AUTOMOBILE and WIMFARM SA
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between GEELY and WIMFARM is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding GEELY AUTOMOBILE and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA 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 WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of GEELY AUTOMOBILE i.e., GEELY AUTOMOBILE and WIMFARM SA go up and down completely randomly.
Pair Corralation between GEELY AUTOMOBILE and WIMFARM SA
Assuming the 90 days trading horizon GEELY AUTOMOBILE is expected to generate 0.76 times more return on investment than WIMFARM SA. However, GEELY AUTOMOBILE is 1.32 times less risky than WIMFARM SA. It trades about 0.05 of its potential returns per unit of risk. WIMFARM SA EO is currently generating about -0.07 per unit of risk. If you would invest 102.00 in GEELY AUTOMOBILE on August 29, 2024 and sell it today you would earn a total of 56.00 from holding GEELY AUTOMOBILE or generate 54.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
GEELY AUTOMOBILE vs. WIMFARM SA EO
Performance |
| Timeline |
| GEELY AUTOMOBILE |
| WIMFARM SA EO |
GEELY AUTOMOBILE and WIMFARM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEELY AUTOMOBILE and WIMFARM SA
The main advantage of trading using opposite GEELY AUTOMOBILE and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEELY AUTOMOBILE position performs unexpectedly, WIMFARM 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.| GEELY AUTOMOBILE vs. Apple Inc | GEELY AUTOMOBILE vs. Apple Inc | GEELY AUTOMOBILE vs. Superior Plus Corp | GEELY AUTOMOBILE vs. SIVERS SEMICONDUCTORS AB |
| WIMFARM SA vs. Daimler Truck Holding | WIMFARM SA vs. Superior Plus Corp | WIMFARM SA vs. NMI Holdings | WIMFARM SA vs. Origin Agritech |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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