Correlation Between LVMH Moët and GEELY AUTOMOBILE

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

Diversification Opportunities for LVMH Moët and GEELY AUTOMOBILE

LVMHGEELYDiversified AwayLVMHGEELYDiversified Away100%
0.55
  Correlation Coefficient

Very weak diversification

The 3 months correlation between LVMH and GEELY is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding LVMH Mot Hennessy and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE and LVMH Moët 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 LVMH Mot Hennessy 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 has no effect on the direction of LVMH Moët i.e., LVMH Moët and GEELY AUTOMOBILE go up and down completely randomly.

Pair Corralation between LVMH Moët and GEELY AUTOMOBILE

Assuming the 90 days horizon LVMH Moët is expected to generate 1.42 times less return on investment than GEELY AUTOMOBILE. But when comparing it to its historical volatility, LVMH Mot Hennessy is 1.54 times less risky than GEELY AUTOMOBILE. It trades about 0.12 of its potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  150.00  in GEELY AUTOMOBILE on October 20, 2024 and sell it today you would earn a total of  28.00  from holding GEELY AUTOMOBILE or generate 18.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

LVMH Mot Hennessy  vs.  GEELY AUTOMOBILE

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -15-10-50510
JavaScript chart by amCharts 3.21.15MOH GRU
       Timeline  
LVMH Mot Hennessy 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in LVMH Mot Hennessy are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, LVMH Moët reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan580600620640660680700
GEELY AUTOMOBILE 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in GEELY AUTOMOBILE are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, GEELY AUTOMOBILE unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1.51.61.71.81.9

LVMH Moët and GEELY AUTOMOBILE Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.74-5.05-3.36-1.660.01.683.425.156.898.63 0.020.030.040.050.060.070.08
JavaScript chart by amCharts 3.21.15MOH GRU
       Returns  

Pair Trading with LVMH Moët and GEELY AUTOMOBILE

The main advantage of trading using opposite LVMH Moët and GEELY AUTOMOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LVMH Moët 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 LVMH Mot Hennessy and GEELY AUTOMOBILE 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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