Correlation Between Aquagold International and Geely Automobile

Can any of the company-specific risk be diversified away by investing in both Aquagold International 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 Aquagold International and Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aquagold International and Geely Automobile Holdings, you can compare the effects of market volatilities on Aquagold International 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 Aquagold International with a short position of Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and Geely Automobile.

Diversification Opportunities for Aquagold International and Geely Automobile

-0.17

Correlation Coefficient

Aquagold International  Geely Automobile

Good diversification

The 3 months correlation between Aquagold and Geely is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International 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 Aquagold International 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 Aquagold International 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 Aquagold International i.e., Aquagold International and Geely Automobile go up and down completely randomly.

Pair Corralation between Aquagold International and Geely Automobile

Given the investment horizon of 90 days Aquagold International is expected to under-perform the Geely Automobile. In addition to that, Aquagold International is 3.57 times more volatile than Geely Automobile Holdings. It trades about -0.17 of its total potential returns per unit of risk. Geely Automobile Holdings is currently generating about 0.09 per unit of volatility. If you would invest  197.00  in Geely Automobile Holdings on December 20, 2024 and sell it today you would earn a total of  35.00  from holding Geely Automobile Holdings or generate 17.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Aquagold International  vs.  Geely Automobile Holdings

Aquagold International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aquagold International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Geely Automobile Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Geely Automobile Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Geely Automobile reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquagold International and Geely Automobile

The main advantage of trading using opposite Aquagold International and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International 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 Aquagold International and Geely Automobile Holdings 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..