Correlation Between Sekisui Chemical and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both Sekisui Chemical 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 Sekisui Chemical and Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sekisui Chemical Co and Geely Automobile Holdings, you can compare the effects of market volatilities on Sekisui Chemical 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 Sekisui Chemical with a short position of Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sekisui Chemical and Geely Automobile.
Diversification Opportunities for Sekisui Chemical and Geely Automobile
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sekisui and Geely is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sekisui Chemical Co 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 Sekisui Chemical 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 Sekisui Chemical Co 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 Sekisui Chemical i.e., Sekisui Chemical and Geely Automobile go up and down completely randomly.
Pair Corralation between Sekisui Chemical and Geely Automobile
Assuming the 90 days horizon Sekisui Chemical is expected to generate 4.42 times less return on investment than Geely Automobile. But when comparing it to its historical volatility, Sekisui Chemical Co is 1.5 times less risky than Geely Automobile. It trades about 0.04 of its potential returns per unit of risk. Geely Automobile Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 77.00 in Geely Automobile Holdings on November 4, 2024 and sell it today you would earn a total of 101.00 from holding Geely Automobile Holdings or generate 131.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sekisui Chemical Co vs. Geely Automobile Holdings
Performance |
| Timeline |
| Sekisui Chemical |
| Geely Automobile Holdings |
Sekisui Chemical and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sekisui Chemical and Geely Automobile
The main advantage of trading using opposite Sekisui Chemical and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sekisui Chemical 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.| Sekisui Chemical vs. Thai Beverage Public | Sekisui Chemical vs. The Boston Beer | Sekisui Chemical vs. SAN MIGUEL BREWERY | Sekisui Chemical vs. Molson Coors Beverage |
| Geely Automobile vs. PennyMac Mortgage Investment | Geely Automobile vs. CDL INVESTMENT | Geely Automobile vs. Easy Software AG | Geely Automobile vs. Vishay Intertechnology |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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