Correlation Between GEELY AUTOMOBILE and Pick N
Can any of the company-specific risk be diversified away by investing in both GEELY AUTOMOBILE and Pick N 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 Pick N into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEELY AUTOMOBILE and Pick n Pay, you can compare the effects of market volatilities on GEELY AUTOMOBILE and Pick N 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 Pick N. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEELY AUTOMOBILE and Pick N.
Diversification Opportunities for GEELY AUTOMOBILE and Pick N
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GEELY and Pick is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding GEELY AUTOMOBILE and Pick n Pay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pick n Pay 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 Pick N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pick n Pay has no effect on the direction of GEELY AUTOMOBILE i.e., GEELY AUTOMOBILE and Pick N go up and down completely randomly.
Pair Corralation between GEELY AUTOMOBILE and Pick N
Assuming the 90 days trading horizon GEELY AUTOMOBILE is expected to generate 1.54 times more return on investment than Pick N. However, GEELY AUTOMOBILE is 1.54 times more volatile than Pick n Pay. It trades about 0.22 of its potential returns per unit of risk. Pick n Pay is currently generating about 0.18 per unit of risk. If you would invest 101.00 in GEELY AUTOMOBILE on September 2, 2024 and sell it today you would earn a total of 67.00 from holding GEELY AUTOMOBILE or generate 66.34% 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. Pick n Pay
Performance |
| Timeline |
| GEELY AUTOMOBILE |
| Pick n Pay |
GEELY AUTOMOBILE and Pick N Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEELY AUTOMOBILE and Pick N
The main advantage of trading using opposite GEELY AUTOMOBILE and Pick N positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEELY AUTOMOBILE position performs unexpectedly, Pick N 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 Pick N will offset losses from the drop in Pick N's long position.| GEELY AUTOMOBILE vs. SIVERS SEMICONDUCTORS AB | GEELY AUTOMOBILE vs. Darden Restaurants | GEELY AUTOMOBILE vs. Reliance Steel Aluminum | GEELY AUTOMOBILE vs. Q2M Managementberatung AG |
| Pick N vs. Taiwan Semiconductor Manufacturing | Pick N vs. AUSTEVOLL SEAFOOD | Pick N vs. Tower Semiconductor | Pick N vs. CN MODERN DAIRY |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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