Correlation Between GameStop Corp and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both GameStop Corp and Geely Automobile 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 GameStop Corp and Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GameStop Corp and Geely Automobile Holdings, you can compare the effects of market volatilities on GameStop Corp and Geely Automobile 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 GameStop Corp with a short position of Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of GameStop Corp and Geely Automobile.
Diversification Opportunities for GameStop Corp and Geely Automobile
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GameStop and Geely is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp and Geely Automobile Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geely Automobile Holdings and GameStop Corp 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 GameStop Corp are associated (or correlated) with Geely Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geely Automobile Holdings has no effect on the direction of GameStop Corp i.e., GameStop Corp and Geely Automobile go up and down completely randomly.
Pair Corralation between GameStop Corp and Geely Automobile
Assuming the 90 days trading horizon GameStop Corp is expected to under-perform the Geely Automobile. In addition to that, GameStop Corp is 1.49 times more volatile than Geely Automobile Holdings. It trades about -0.02 of its total potential returns per unit of risk. Geely Automobile Holdings is currently generating about 0.15 per unit of volatility. If you would invest 158.00 in Geely Automobile Holdings on October 25, 2024 and sell it today you would earn a total of 22.00 from holding Geely Automobile Holdings or generate 13.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GameStop Corp vs. Geely Automobile Holdings
Performance |
| Timeline |
| GameStop Corp |
| Geely Automobile Holdings |
GameStop Corp and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GameStop Corp and Geely Automobile
The main advantage of trading using opposite GameStop Corp and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GameStop Corp position performs unexpectedly, Geely Automobile 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 Geely Automobile will offset losses from the drop in Geely Automobile's long position.| GameStop Corp vs. Summit Materials | GameStop Corp vs. EAGLE MATERIALS | GameStop Corp vs. Alaska Air Group | GameStop Corp vs. Pentair plc |
| Geely Automobile vs. Air New Zealand | Geely Automobile vs. Pentair plc | Geely Automobile vs. CHINA SOUTHN AIR H | Geely Automobile vs. Spirent Communications plc |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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