Correlation Between Ribbon Communications and GEELY AUTOMOBILE
Can any of the company-specific risk be diversified away by investing in both Ribbon Communications 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 Ribbon Communications and GEELY AUTOMOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ribbon Communications and GEELY AUTOMOBILE, you can compare the effects of market volatilities on Ribbon Communications 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 Ribbon Communications with a short position of GEELY AUTOMOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ribbon Communications and GEELY AUTOMOBILE.
Diversification Opportunities for Ribbon Communications and GEELY AUTOMOBILE
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ribbon and GEELY is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ribbon Communications and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE and Ribbon Communications 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 Ribbon Communications 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 has no effect on the direction of Ribbon Communications i.e., Ribbon Communications and GEELY AUTOMOBILE go up and down completely randomly.
Pair Corralation between Ribbon Communications and GEELY AUTOMOBILE
Assuming the 90 days trading horizon Ribbon Communications is expected to generate 2.27 times less return on investment than GEELY AUTOMOBILE. But when comparing it to its historical volatility, Ribbon Communications is 1.0 times less risky than GEELY AUTOMOBILE. It trades about 0.12 of its potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 173.00 in GEELY AUTOMOBILE on November 8, 2024 and sell it today you would earn a total of 26.00 from holding GEELY AUTOMOBILE or generate 15.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ribbon Communications vs. GEELY AUTOMOBILE
Performance |
| Timeline |
| Ribbon Communications |
| GEELY AUTOMOBILE |
Ribbon Communications and GEELY AUTOMOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ribbon Communications and GEELY AUTOMOBILE
The main advantage of trading using opposite Ribbon Communications and GEELY AUTOMOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ribbon Communications 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.| Ribbon Communications vs. Digilife Technologies Limited | Ribbon Communications vs. SOFI TECHNOLOGIES | Ribbon Communications vs. HELIOS TECHS INC | Ribbon Communications vs. Minerals Technologies |
| GEELY AUTOMOBILE vs. MACOM Technology Solutions | GEELY AUTOMOBILE vs. X FAB Silicon Foundries | GEELY AUTOMOBILE vs. EMBARK EDUCATION LTD | GEELY AUTOMOBILE vs. STRAYER EDUCATION |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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