Correlation Between GEELY AUTOMOBILE and THUNDELARRA
Can any of the company-specific risk be diversified away by investing in both GEELY AUTOMOBILE and THUNDELARRA 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 THUNDELARRA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEELY AUTOMOBILE and THUNDELARRA, you can compare the effects of market volatilities on GEELY AUTOMOBILE and THUNDELARRA 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 THUNDELARRA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEELY AUTOMOBILE and THUNDELARRA.
Diversification Opportunities for GEELY AUTOMOBILE and THUNDELARRA
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GEELY and THUNDELARRA is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding GEELY AUTOMOBILE and THUNDELARRA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THUNDELARRA 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 THUNDELARRA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THUNDELARRA has no effect on the direction of GEELY AUTOMOBILE i.e., GEELY AUTOMOBILE and THUNDELARRA go up and down completely randomly.
Pair Corralation between GEELY AUTOMOBILE and THUNDELARRA
Assuming the 90 days trading horizon GEELY AUTOMOBILE is expected to under-perform the THUNDELARRA. But the stock apears to be less risky and, when comparing its historical volatility, GEELY AUTOMOBILE is 1.61 times less risky than THUNDELARRA. The stock trades about -0.13 of its potential returns per unit of risk. The THUNDELARRA is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 0.52 in THUNDELARRA on October 25, 2024 and sell it today you would earn a total of 0.08 from holding THUNDELARRA or generate 15.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
GEELY AUTOMOBILE vs. THUNDELARRA
Performance |
| Timeline |
| GEELY AUTOMOBILE |
| THUNDELARRA |
GEELY AUTOMOBILE and THUNDELARRA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEELY AUTOMOBILE and THUNDELARRA
The main advantage of trading using opposite GEELY AUTOMOBILE and THUNDELARRA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEELY AUTOMOBILE position performs unexpectedly, THUNDELARRA 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 THUNDELARRA will offset losses from the drop in THUNDELARRA's long position.| GEELY AUTOMOBILE vs. NIGHTINGALE HEALTH EO | GEELY AUTOMOBILE vs. Cardinal Health | GEELY AUTOMOBILE vs. Iridium Communications | GEELY AUTOMOBILE vs. National Health Investors |
| THUNDELARRA vs. Tyson Foods | THUNDELARRA vs. Maple Leaf Foods | THUNDELARRA vs. GEELY AUTOMOBILE | THUNDELARRA vs. COFCO Joycome Foods |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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