Correlation Between C PARAN and Geely Automobile

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

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

Diversification Opportunities for C PARAN and Geely Automobile

0.0

Correlation Coefficient

C PARAN  Geely Automobile

Pay attention - limited upside

The 3 months correlation between ELP1 and Geely is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding C PARAN EN 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 C PARAN 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 C PARAN EN 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 C PARAN i.e., C PARAN and Geely Automobile go up and down completely randomly.

Pair Corralation between C PARAN and Geely Automobile

If you would invest  93.00  in Geely Automobile Holdings on October 5, 2024 and sell it today you would earn a total of  86.00  from holding Geely Automobile Holdings or generate 92.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

C PARAN EN  vs.  Geely Automobile Holdings

C PARAN EN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days C PARAN EN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, C PARAN is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Geely Automobile Holdings

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Geely Automobile Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Geely Automobile reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with C PARAN and Geely Automobile

The main advantage of trading using opposite C PARAN and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C PARAN 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 C PARAN EN 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.