Correlation Between RYMAN HEALTHCAR and Geely Automobile

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

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

Diversification Opportunities for RYMAN HEALTHCAR and Geely Automobile

-0.77

Correlation Coefficient

RYMAN HEALTHCAR  Geely Automobile

Pay attention - limited upside

The 3 months correlation between RYMAN and Geely is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding RYMAN HEALTHCAR 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 RYMAN HEALTHCAR 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 RYMAN HEALTHCAR 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 RYMAN HEALTHCAR i.e., RYMAN HEALTHCAR and Geely Automobile go up and down completely randomly.

Pair Corralation between RYMAN HEALTHCAR and Geely Automobile

Assuming the 90 days trading horizon RYMAN HEALTHCAR is expected to under-perform the Geely Automobile. But the stock apears to be less risky and, when comparing its historical volatility, RYMAN HEALTHCAR is 1.29 times less risky than Geely Automobile. The stock trades about -0.04 of its potential returns per unit of risk. The Geely Automobile Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  95.00  in Geely Automobile Holdings on October 26, 2024 and sell it today you would earn a total of  82.00  from holding Geely Automobile Holdings or generate 86.32% return on investment over 90 days.

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

RYMAN HEALTHCAR  vs.  Geely Automobile Holdings

RYMAN HEALTHCAR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RYMAN HEALTHCAR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Geely Automobile Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with RYMAN HEALTHCAR and Geely Automobile

The main advantage of trading using opposite RYMAN HEALTHCAR and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RYMAN HEALTHCAR 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 RYMAN HEALTHCAR 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.