Correlation Between GEELY AUTOMOBILE and GVS SPA
Can any of the company-specific risk be diversified away by investing in both GEELY AUTOMOBILE and GVS SPA 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 GVS SPA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEELY AUTOMOBILE and GVS SPA, you can compare the effects of market volatilities on GEELY AUTOMOBILE and GVS SPA 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 GVS SPA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEELY AUTOMOBILE and GVS SPA.
Diversification Opportunities for GEELY AUTOMOBILE and GVS SPA
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GEELY and GVS is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding GEELY AUTOMOBILE and GVS SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GVS SPA 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 GVS SPA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GVS SPA has no effect on the direction of GEELY AUTOMOBILE i.e., GEELY AUTOMOBILE and GVS SPA go up and down completely randomly.
Pair Corralation between GEELY AUTOMOBILE and GVS SPA
Assuming the 90 days trading horizon GEELY AUTOMOBILE is expected to generate 1.03 times more return on investment than GVS SPA. However, GEELY AUTOMOBILE is 1.03 times more volatile than GVS SPA. It trades about 0.1 of its potential returns per unit of risk. GVS SPA is currently generating about 0.01 per unit of risk. If you would invest 71.00 in GEELY AUTOMOBILE on December 4, 2024 and sell it today you would earn a total of 151.00 from holding GEELY AUTOMOBILE or generate 212.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.8% |
Values | Daily Returns |
GEELY AUTOMOBILE vs. GVS SPA
Performance |
Timeline |
GEELY AUTOMOBILE |
GVS SPA |
GEELY AUTOMOBILE and GVS SPA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GEELY AUTOMOBILE and GVS SPA
The main advantage of trading using opposite GEELY AUTOMOBILE and GVS SPA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEELY AUTOMOBILE position performs unexpectedly, GVS SPA 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 GVS SPA will offset losses from the drop in GVS SPA's long position.GEELY AUTOMOBILE vs. Infrastrutture Wireless Italiane | GEELY AUTOMOBILE vs. UNIDOC HEALTH P | GEELY AUTOMOBILE vs. Planet Fitness | GEELY AUTOMOBILE vs. CARDINAL HEALTH |
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Check out your portfolio center.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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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