Correlation Between GEELY AUTOMOBILE and Gelsenwasser
Can any of the company-specific risk be diversified away by investing in both GEELY AUTOMOBILE and Gelsenwasser 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 Gelsenwasser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEELY AUTOMOBILE and Gelsenwasser AG, you can compare the effects of market volatilities on GEELY AUTOMOBILE and Gelsenwasser 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 Gelsenwasser. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEELY AUTOMOBILE and Gelsenwasser.
Diversification Opportunities for GEELY AUTOMOBILE and Gelsenwasser
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between GEELY and Gelsenwasser is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding GEELY AUTOMOBILE and Gelsenwasser AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gelsenwasser AG 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 Gelsenwasser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gelsenwasser AG has no effect on the direction of GEELY AUTOMOBILE i.e., GEELY AUTOMOBILE and Gelsenwasser go up and down completely randomly.
Pair Corralation between GEELY AUTOMOBILE and Gelsenwasser
Assuming the 90 days trading horizon GEELY AUTOMOBILE is expected to generate 2.03 times less return on investment than Gelsenwasser. But when comparing it to its historical volatility, GEELY AUTOMOBILE is 1.53 times less risky than Gelsenwasser. It trades about 0.06 of its potential returns per unit of risk. Gelsenwasser AG is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 49,800 in Gelsenwasser AG on November 4, 2024 and sell it today you would earn a total of 1,700 from holding Gelsenwasser AG or generate 3.41% 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. Gelsenwasser AG
Performance |
| Timeline |
| GEELY AUTOMOBILE |
| Gelsenwasser AG |
GEELY AUTOMOBILE and Gelsenwasser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEELY AUTOMOBILE and Gelsenwasser
The main advantage of trading using opposite GEELY AUTOMOBILE and Gelsenwasser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEELY AUTOMOBILE position performs unexpectedly, Gelsenwasser 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 Gelsenwasser will offset losses from the drop in Gelsenwasser's long position.| GEELY AUTOMOBILE vs. Molson Coors Beverage | GEELY AUTOMOBILE vs. PLAYMATES TOYS | GEELY AUTOMOBILE vs. US FOODS HOLDING | GEELY AUTOMOBILE vs. PATTIES FOODS |
| Gelsenwasser vs. TOWNSQUARE MEDIA INC | Gelsenwasser vs. Melco Resorts Entertainment | Gelsenwasser vs. Fuji Media Holdings | Gelsenwasser vs. Peijia Medical 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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