Correlation Between Lerøy Seafood and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both Lerøy Seafood 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 Lerøy Seafood and Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lery Seafood Group and Geely Automobile Holdings, you can compare the effects of market volatilities on Lerøy Seafood 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 Lerøy Seafood with a short position of Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lerøy Seafood and Geely Automobile.
Diversification Opportunities for Lerøy Seafood and Geely Automobile
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lerøy and Geely is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Lery Seafood Group 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 Lerøy Seafood 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 Lery Seafood Group 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 Lerøy Seafood i.e., Lerøy Seafood and Geely Automobile go up and down completely randomly.
Pair Corralation between Lerøy Seafood and Geely Automobile
Assuming the 90 days horizon Lerøy Seafood is expected to generate 5.09 times less return on investment than Geely Automobile. But when comparing it to its historical volatility, Lery Seafood Group is 1.62 times less risky than Geely Automobile. It trades about 0.06 of its potential returns per unit of risk. Geely Automobile Holdings is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 170.00 in Geely Automobile Holdings on September 13, 2024 and sell it today you would earn a total of 21.00 from holding Geely Automobile Holdings or generate 12.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lery Seafood Group vs. Geely Automobile Holdings
Performance |
| Timeline |
| Lery Seafood Group |
| Geely Automobile Holdings |
Lerøy Seafood and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lerøy Seafood and Geely Automobile
The main advantage of trading using opposite Lerøy Seafood and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lerøy Seafood 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.| Lerøy Seafood vs. Hormel Foods | Lerøy Seafood vs. Superior Plus Corp | Lerøy Seafood vs. SIVERS SEMICONDUCTORS AB | Lerøy Seafood vs. NorAm Drilling AS |
| Geely Automobile vs. Focus Home Interactive | Geely Automobile vs. Haier Smart Home | Geely Automobile vs. Haverty Furniture Companies | Geely Automobile vs. Broadridge Financial Solutions |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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