Correlation Between MeVis Medical and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both MeVis Medical 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 MeVis Medical and Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MeVis Medical Solutions and Geely Automobile Holdings, you can compare the effects of market volatilities on MeVis Medical 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 MeVis Medical with a short position of Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of MeVis Medical and Geely Automobile.
Diversification Opportunities for MeVis Medical and Geely Automobile
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MeVis and Geely is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding MeVis Medical Solutions 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 MeVis Medical 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 MeVis Medical Solutions 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 MeVis Medical i.e., MeVis Medical and Geely Automobile go up and down completely randomly.
Pair Corralation between MeVis Medical and Geely Automobile
Assuming the 90 days trading horizon MeVis Medical Solutions is expected to under-perform the Geely Automobile. But the stock apears to be less risky and, when comparing its historical volatility, MeVis Medical Solutions is 2.24 times less risky than Geely Automobile. The stock trades about -0.04 of its potential returns per unit of risk. The Geely Automobile Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 96.00 in Geely Automobile Holdings on August 26, 2024 and sell it today you would earn a total of 68.00 from holding Geely Automobile Holdings or generate 70.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MeVis Medical Solutions vs. Geely Automobile Holdings
Performance |
| Timeline |
| MeVis Medical Solutions |
| Geely Automobile Holdings |
MeVis Medical and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MeVis Medical and Geely Automobile
The main advantage of trading using opposite MeVis Medical and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MeVis Medical 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.| MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc |
| Geely Automobile vs. Tesla Inc | Geely Automobile vs. BYD Company Limited | Geely Automobile vs. Superior Plus Corp | Geely Automobile vs. NMI Holdings |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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