Correlation Between KOWORLD AG and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both KOWORLD AG 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 KOWORLD AG and Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KOWORLD AG and Geely Automobile Holdings, you can compare the effects of market volatilities on KOWORLD AG 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 KOWORLD AG with a short position of Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of KOWORLD AG and Geely Automobile.
Diversification Opportunities for KOWORLD AG and Geely Automobile
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KOWORLD and Geely is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding KOWORLD 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 KOWORLD AG 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 KOWORLD 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 KOWORLD AG i.e., KOWORLD AG and Geely Automobile go up and down completely randomly.
Pair Corralation between KOWORLD AG and Geely Automobile
Assuming the 90 days trading horizon KOWORLD AG is expected to generate 0.98 times more return on investment than Geely Automobile. However, KOWORLD AG is 1.02 times less risky than Geely Automobile. It trades about 0.11 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 2,800 in KOWORLD AG on November 3, 2024 and sell it today you would earn a total of 100.00 from holding KOWORLD AG or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KOWORLD AG vs. Geely Automobile Holdings
Performance |
| Timeline |
| KOWORLD AG |
| Geely Automobile Holdings |
KOWORLD AG and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KOWORLD AG and Geely Automobile
The main advantage of trading using opposite KOWORLD AG and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KOWORLD AG 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.| KOWORLD AG vs. Autohome ADR | KOWORLD AG vs. DATAGROUP SE | KOWORLD AG vs. Haverty Furniture Companies | KOWORLD AG vs. OFFICE DEPOT |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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