Correlation Between Weyerhaeuser and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both Weyerhaeuser 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 Weyerhaeuser and Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weyerhaeuser and Geely Automobile Holdings, you can compare the effects of market volatilities on Weyerhaeuser 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 Weyerhaeuser with a short position of Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weyerhaeuser and Geely Automobile.
Diversification Opportunities for Weyerhaeuser and Geely Automobile
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Weyerhaeuser and Geely is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Weyerhaeuser 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 Weyerhaeuser 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 Weyerhaeuser 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 Weyerhaeuser i.e., Weyerhaeuser and Geely Automobile go up and down completely randomly.
Pair Corralation between Weyerhaeuser and Geely Automobile
Assuming the 90 days horizon Weyerhaeuser is expected to generate 0.88 times more return on investment than Geely Automobile. However, Weyerhaeuser is 1.14 times less risky than Geely Automobile. It trades about 0.23 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 2,746 in Weyerhaeuser on November 5, 2024 and sell it today you would earn a total of 183.00 from holding Weyerhaeuser or generate 6.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weyerhaeuser vs. Geely Automobile Holdings
Performance |
| Timeline |
| Weyerhaeuser |
| Geely Automobile Holdings |
Weyerhaeuser and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weyerhaeuser and Geely Automobile
The main advantage of trading using opposite Weyerhaeuser and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weyerhaeuser 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.| Weyerhaeuser vs. Guidewire Software | Weyerhaeuser vs. Magic Software Enterprises | Weyerhaeuser vs. Take Two Interactive Software | Weyerhaeuser vs. Grand Canyon Education |
| Geely Automobile vs. Tesla Inc | Geely Automobile vs. Toyota Motor | Geely Automobile vs. Toyota Motor | Geely Automobile vs. BYD Company Limited |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |