Correlation Between ADRIATIC METALS and GEELY AUTOMOBILE

Can any of the company-specific risk be diversified away by investing in both ADRIATIC METALS 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 ADRIATIC METALS and GEELY AUTOMOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ADRIATIC METALS LS 013355 and GEELY AUTOMOBILE, you can compare the effects of market volatilities on ADRIATIC METALS 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 ADRIATIC METALS with a short position of GEELY AUTOMOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADRIATIC METALS and GEELY AUTOMOBILE.

Diversification Opportunities for ADRIATIC METALS and GEELY AUTOMOBILE

0.66

Correlation Coefficient

ADRIATIC METALS  GEELY AUTOMOBILE

Poor diversification

The 3 months correlation between ADRIATIC and GEELY is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding ADRIATIC METALS LS 013355 and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE and ADRIATIC METALS 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 ADRIATIC METALS LS 013355 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 has no effect on the direction of ADRIATIC METALS i.e., ADRIATIC METALS and GEELY AUTOMOBILE go up and down completely randomly.

Pair Corralation between ADRIATIC METALS and GEELY AUTOMOBILE

Assuming the 90 days trading horizon ADRIATIC METALS is expected to generate 8.64 times less return on investment than GEELY AUTOMOBILE. In addition to that, ADRIATIC METALS is 1.33 times more volatile than GEELY AUTOMOBILE. It trades about 0.01 of its total potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about 0.16 per unit of volatility. If you would invest  105.00  in GEELY AUTOMOBILE on September 23, 2024 and sell it today you would earn a total of  84.00  from holding GEELY AUTOMOBILE or generate 80.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

ADRIATIC METALS LS 013355  vs.  GEELY AUTOMOBILE

ADRIATIC METALS LS

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ADRIATIC METALS LS 013355 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ADRIATIC METALS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

GEELY AUTOMOBILE

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GEELY AUTOMOBILE are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, GEELY AUTOMOBILE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ADRIATIC METALS and GEELY AUTOMOBILE

The main advantage of trading using opposite ADRIATIC METALS and GEELY AUTOMOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADRIATIC METALS 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.

The idea behind ADRIATIC METALS LS 013355 and GEELY AUTOMOBILE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.