Correlation Between Zumtobel Group and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both Zumtobel Group 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 Zumtobel Group and Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zumtobel Group AG and Geely Automobile Holdings, you can compare the effects of market volatilities on Zumtobel Group 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 Zumtobel Group with a short position of Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zumtobel Group and Geely Automobile.
Diversification Opportunities for Zumtobel Group and Geely Automobile
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zumtobel and Geely is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Zumtobel Group AG 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 Zumtobel Group 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 Zumtobel Group AG 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 Zumtobel Group i.e., Zumtobel Group and Geely Automobile go up and down completely randomly.
Pair Corralation between Zumtobel Group and Geely Automobile
Assuming the 90 days horizon Zumtobel Group AG is expected to under-perform the Geely Automobile. But the stock apears to be less risky and, when comparing its historical volatility, Zumtobel Group AG is 1.63 times less risky than Geely Automobile. The stock trades about -0.05 of its potential returns per unit of risk. The Geely Automobile Holdings is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 168.00 in Geely Automobile Holdings on September 14, 2024 and sell it today you would earn a total of 26.00 from holding Geely Automobile Holdings or generate 15.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zumtobel Group AG vs. Geely Automobile Holdings
Performance |
| Timeline |
| Zumtobel Group AG |
| Geely Automobile Holdings |
Zumtobel Group and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zumtobel Group and Geely Automobile
The main advantage of trading using opposite Zumtobel Group and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zumtobel Group 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.| Zumtobel Group vs. Geely Automobile Holdings | Zumtobel Group vs. Carsales | Zumtobel Group vs. JD SPORTS FASH | Zumtobel Group vs. SCIENCE IN SPORT |
| Geely Automobile vs. BYD Company Limited | Geely Automobile vs. MERCEDES BENZ GRP ADR14 | Geely Automobile vs. Superior Plus Corp | Geely Automobile vs. SIVERS SEMICONDUCTORS AB |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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