Correlation Between Geely Automobile and Canon Marketing

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Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Canon Marketing 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 Geely Automobile and Canon Marketing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geely Automobile Holdings and Canon Marketing Japan, you can compare the effects of market volatilities on Geely Automobile and Canon Marketing 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 Geely Automobile with a short position of Canon Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Canon Marketing.

Diversification Opportunities for Geely Automobile and Canon Marketing

GeelyCanonDiversified AwayGeelyCanonDiversified Away100%
0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between Geely and Canon is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Canon Marketing Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon Marketing Japan and Geely Automobile 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 Geely Automobile Holdings are associated (or correlated) with Canon Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canon Marketing Japan has no effect on the direction of Geely Automobile i.e., Geely Automobile and Canon Marketing go up and down completely randomly.

Pair Corralation between Geely Automobile and Canon Marketing

Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 2.44 times more return on investment than Canon Marketing. However, Geely Automobile is 2.44 times more volatile than Canon Marketing Japan. It trades about 0.13 of its potential returns per unit of risk. Canon Marketing Japan is currently generating about 0.16 per unit of risk. If you would invest  160.00  in Geely Automobile Holdings on November 15, 2024 and sell it today you would earn a total of  37.00  from holding Geely Automobile Holdings or generate 23.13% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Geely Automobile Holdings  vs.  Canon Marketing Japan

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -10-5051015
JavaScript chart by amCharts 3.21.15GRU CNJ
       Timeline  
Geely Automobile Holdings 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Geely Automobile Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Geely Automobile reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.61.71.81.922.12.2
Canon Marketing Japan 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Canon Marketing Japan are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Canon Marketing reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb28.52929.53030.53131.53232.5

Geely Automobile and Canon Marketing Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.55-7.15-4.75-2.360.02.44.897.379.8612.34 0.050.100.150.200.25
JavaScript chart by amCharts 3.21.15GRU CNJ
       Returns  

Pair Trading with Geely Automobile and Canon Marketing

The main advantage of trading using opposite Geely Automobile and Canon Marketing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Canon Marketing 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 Canon Marketing will offset losses from the drop in Canon Marketing's long position.
The idea behind Geely Automobile Holdings and Canon Marketing Japan 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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