Correlation Between GEELY AUTOMOBILE and Yamaha
Can any of the company-specific risk be diversified away by investing in both GEELY AUTOMOBILE and Yamaha 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 Yamaha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEELY AUTOMOBILE and Yamaha Motor Co, you can compare the effects of market volatilities on GEELY AUTOMOBILE and Yamaha 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 Yamaha. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEELY AUTOMOBILE and Yamaha.
Diversification Opportunities for GEELY AUTOMOBILE and Yamaha
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GEELY and Yamaha is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding GEELY AUTOMOBILE and Yamaha Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yamaha Motor 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 Yamaha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yamaha Motor has no effect on the direction of GEELY AUTOMOBILE i.e., GEELY AUTOMOBILE and Yamaha go up and down completely randomly.
Pair Corralation between GEELY AUTOMOBILE and Yamaha
Assuming the 90 days trading horizon GEELY AUTOMOBILE is expected to under-perform the Yamaha. In addition to that, GEELY AUTOMOBILE is 1.72 times more volatile than Yamaha Motor Co. It trades about -0.01 of its total potential returns per unit of risk. Yamaha Motor Co is currently generating about 0.03 per unit of volatility. If you would invest 804.00 in Yamaha Motor Co on August 31, 2024 and sell it today you would earn a total of 8.00 from holding Yamaha Motor Co or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
GEELY AUTOMOBILE vs. Yamaha Motor Co
Performance |
| Timeline |
| GEELY AUTOMOBILE |
| Yamaha Motor |
GEELY AUTOMOBILE and Yamaha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEELY AUTOMOBILE and Yamaha
The main advantage of trading using opposite GEELY AUTOMOBILE and Yamaha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEELY AUTOMOBILE position performs unexpectedly, Yamaha 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 Yamaha will offset losses from the drop in Yamaha'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 |
| Yamaha vs. CapitaLand Investment Limited | Yamaha vs. GEELY AUTOMOBILE | Yamaha vs. CDL INVESTMENT | Yamaha vs. PennantPark Investment |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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