Correlation Between GEELY AUTOMOBILE and TRADEGATE
Can any of the company-specific risk be diversified away by investing in both GEELY AUTOMOBILE and TRADEGATE 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 TRADEGATE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEELY AUTOMOBILE and TRADEGATE, you can compare the effects of market volatilities on GEELY AUTOMOBILE and TRADEGATE 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 TRADEGATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEELY AUTOMOBILE and TRADEGATE.
Diversification Opportunities for GEELY AUTOMOBILE and TRADEGATE
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GEELY and TRADEGATE is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding GEELY AUTOMOBILE and TRADEGATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEGATE 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 TRADEGATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEGATE has no effect on the direction of GEELY AUTOMOBILE i.e., GEELY AUTOMOBILE and TRADEGATE go up and down completely randomly.
Pair Corralation between GEELY AUTOMOBILE and TRADEGATE
Assuming the 90 days trading horizon GEELY AUTOMOBILE is expected to generate 8.74 times more return on investment than TRADEGATE. However, GEELY AUTOMOBILE is 8.74 times more volatile than TRADEGATE. It trades about 0.06 of its potential returns per unit of risk. TRADEGATE is currently generating about 0.0 per unit of risk. If you would invest 176.00 in GEELY AUTOMOBILE on November 4, 2024 and sell it today you would earn a total of 3.00 from holding GEELY AUTOMOBILE or generate 1.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GEELY AUTOMOBILE vs. TRADEGATE
Performance |
| Timeline |
| GEELY AUTOMOBILE |
| TRADEGATE |
GEELY AUTOMOBILE and TRADEGATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEELY AUTOMOBILE and TRADEGATE
The main advantage of trading using opposite GEELY AUTOMOBILE and TRADEGATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEELY AUTOMOBILE position performs unexpectedly, TRADEGATE 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 TRADEGATE will offset losses from the drop in TRADEGATE's long position.| GEELY AUTOMOBILE vs. Daido Steel Co | GEELY AUTOMOBILE vs. Delta Electronics Public | GEELY AUTOMOBILE vs. COSMOSTEEL HLDGS | GEELY AUTOMOBILE vs. Samsung Electronics Co |
| TRADEGATE vs. STRAYER EDUCATION | TRADEGATE vs. American Public Education | TRADEGATE vs. Melco Resorts Entertainment | TRADEGATE vs. G8 EDUCATION |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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