Correlation Between Lion One and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and Geely Automobile Holdings, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Geely Automobile.
Diversification Opportunities for Lion One and Geely Automobile
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lion and Geely is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals 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 Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and Geely Automobile go up and down completely randomly.
Pair Corralation between Lion One and Geely Automobile
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Geely Automobile. In addition to that, Lion One is 1.15 times more volatile than Geely Automobile Holdings. It trades about -0.12 of its total potential returns per unit of risk. Geely Automobile Holdings is currently generating about 0.19 per unit of volatility. If you would invest 170.00 in Geely Automobile Holdings on September 13, 2024 and sell it today you would earn a total of 24.00 from holding Geely Automobile Holdings or generate 14.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lion One Metals vs. Geely Automobile Holdings
Performance |
| Timeline |
| Lion One Metals |
| Geely Automobile Holdings |
Lion One and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Geely Automobile
The main advantage of trading using opposite Lion One and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.| Lion One vs. Franco Nevada | Lion One vs. Superior Plus Corp | Lion One vs. SIVERS SEMICONDUCTORS AB | Lion One vs. Norsk Hydro ASA |
| Geely Automobile vs. BYD Company Limited | Geely Automobile vs. MERCEDES BENZ GRP ADR14 | Geely Automobile vs. Superior Plus Corp | Geely Automobile vs. SIVERS SEMICONDUCTORS AB |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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