Correlation Between NFI and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both NFI 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 NFI and Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NFI Group and Geely Automobile Holdings, you can compare the effects of market volatilities on NFI 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 NFI with a short position of Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of NFI and Geely Automobile.
Diversification Opportunities for NFI and Geely Automobile
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NFI and Geely is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding NFI Group 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 NFI 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 NFI Group 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 NFI i.e., NFI and Geely Automobile go up and down completely randomly.
Pair Corralation between NFI and Geely Automobile
Assuming the 90 days horizon NFI Group is expected to generate 1.23 times more return on investment than Geely Automobile. However, NFI is 1.23 times more volatile than Geely Automobile Holdings. It trades about 0.04 of its potential returns per unit of risk. Geely Automobile Holdings is currently generating about 0.02 per unit of risk. If you would invest 705.00 in NFI Group on August 27, 2024 and sell it today you would earn a total of 340.00 from holding NFI Group or generate 48.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NFI Group vs. Geely Automobile Holdings
Performance |
| Timeline |
| NFI Group |
| Geely Automobile Holdings |
NFI and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NFI and Geely Automobile
The main advantage of trading using opposite NFI and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NFI 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.| NFI vs. Zapp Electric Vehicles | NFI vs. Guangzhou Automobile Group | NFI vs. Exor NV | NFI vs. Aston Martin Lagonda |
| Geely Automobile vs. Isuzu Motors | Geely Automobile vs. Renault SA | Geely Automobile vs. Toyota Motor Corp | Geely Automobile vs. Porsche Automobile Holding |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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