Correlation Between NEXA RESOURCES and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both NEXA RESOURCES 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 NEXA RESOURCES and Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEXA RESOURCES SA and Geely Automobile Holdings, you can compare the effects of market volatilities on NEXA RESOURCES 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 NEXA RESOURCES with a short position of Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXA RESOURCES and Geely Automobile.
Diversification Opportunities for NEXA RESOURCES and Geely Automobile
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NEXA and Geely is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding NEXA RESOURCES SA 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 NEXA RESOURCES 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 NEXA RESOURCES SA 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 NEXA RESOURCES i.e., NEXA RESOURCES and Geely Automobile go up and down completely randomly.
Pair Corralation between NEXA RESOURCES and Geely Automobile
Assuming the 90 days horizon NEXA RESOURCES is expected to generate 2.04 times less return on investment than Geely Automobile. But when comparing it to its historical volatility, NEXA RESOURCES SA is 2.05 times less risky than Geely Automobile. It trades about 0.1 of its potential returns per unit of risk. Geely Automobile Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 145.00 in Geely Automobile Holdings on September 3, 2024 and sell it today you would earn a total of 22.00 from holding Geely Automobile Holdings or generate 15.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEXA RESOURCES SA vs. Geely Automobile Holdings
Performance |
| Timeline |
| NEXA RESOURCES SA |
| Geely Automobile Holdings |
NEXA RESOURCES and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEXA RESOURCES and Geely Automobile
The main advantage of trading using opposite NEXA RESOURCES and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXA RESOURCES 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.| NEXA RESOURCES vs. G III Apparel Group | NEXA RESOURCES vs. MTI WIRELESS EDGE | NEXA RESOURCES vs. Tower One Wireless | NEXA RESOURCES vs. International Consolidated Airlines |
| Geely Automobile vs. Tesla Inc | Geely Automobile vs. Toyota Motor | Geely Automobile vs. BYD Company Limited | Geely Automobile vs. Superior Plus Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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