Correlation Between Information Services and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both Information Services 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 Information Services and Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Information Services International Dentsu and Geely Automobile Holdings, you can compare the effects of market volatilities on Information Services 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 Information Services with a short position of Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Information Services and Geely Automobile.
Diversification Opportunities for Information Services and Geely Automobile
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Information and Geely is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Information Services Internati 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 Information Services 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 Information Services International Dentsu 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 Information Services i.e., Information Services and Geely Automobile go up and down completely randomly.
Pair Corralation between Information Services and Geely Automobile
Assuming the 90 days horizon Information Services International Dentsu is expected to generate 0.91 times more return on investment than Geely Automobile. However, Information Services International Dentsu is 1.1 times less risky than Geely Automobile. It trades about -0.09 of its potential returns per unit of risk. Geely Automobile Holdings is currently generating about -0.22 per unit of risk. If you would invest 3,600 in Information Services International Dentsu on October 11, 2024 and sell it today you would lose (100.00) from holding Information Services International Dentsu or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Information Services Internati vs. Geely Automobile Holdings
Performance |
| Timeline |
| Information Services |
| Geely Automobile Holdings |
Information Services and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Information Services and Geely Automobile
The main advantage of trading using opposite Information Services and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Information Services 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.| Information Services vs. Accenture plc | Information Services vs. International Business Machines | Information Services vs. Capgemini SE | Information Services vs. FUJITSU LTD ADR |
| Geely Automobile vs. Information Services International Dentsu | Geely Automobile vs. Synchrony Financial | Geely Automobile vs. Virtu Financial | Geely Automobile vs. The Hanover Insurance |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |