Correlation Between GEELY AUTOMOBILE and Cellink AB

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

By analyzing existing cross correlation between GEELY AUTOMOBILE and Cellink AB, you can compare the effects of market volatilities on GEELY AUTOMOBILE and Cellink AB 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 Cellink AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEELY AUTOMOBILE and Cellink AB.

Diversification Opportunities for GEELY AUTOMOBILE and Cellink AB

-0.47

Correlation Coefficient

GEELY AUTOMOBILE  Cellink AB

Very good diversification

The 3 months correlation between GEELY and Cellink is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding GEELY AUTOMOBILE and Cellink AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellink AB 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 are associated (or correlated) with Cellink AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellink AB has no effect on the direction of GEELY AUTOMOBILE i.e., GEELY AUTOMOBILE and Cellink AB go up and down completely randomly.

Pair Corralation between GEELY AUTOMOBILE and Cellink AB

Assuming the 90 days trading horizon GEELY AUTOMOBILE is expected to under-perform the Cellink AB. But the stock apears to be less risky and, when comparing its historical volatility, GEELY AUTOMOBILE is 2.17 times less risky than Cellink AB. The stock trades about -0.17 of its potential returns per unit of risk. The Cellink AB is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  292.00  in Cellink AB on October 26, 2024 and sell it today you would lose (5.00) from holding Cellink AB or give up 1.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

GEELY AUTOMOBILE  vs.  Cellink AB

GEELY AUTOMOBILE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GEELY AUTOMOBILE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, GEELY AUTOMOBILE is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Cellink AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cellink AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with GEELY AUTOMOBILE and Cellink AB

The main advantage of trading using opposite GEELY AUTOMOBILE and Cellink AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEELY AUTOMOBILE position performs unexpectedly, Cellink AB 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 Cellink AB will offset losses from the drop in Cellink AB's long position.

The idea behind GEELY AUTOMOBILE and Cellink AB 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.