Correlation Between WIZZ AIR and GEELY AUTOMOBILE

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

By analyzing existing cross correlation between WIZZ AIR HLDGUNSPADR4 and GEELY AUTOMOBILE, you can compare the effects of market volatilities on WIZZ AIR 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 WIZZ AIR with a short position of GEELY AUTOMOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIZZ AIR and GEELY AUTOMOBILE.

Diversification Opportunities for WIZZ AIR and GEELY AUTOMOBILE

0.41

Correlation Coefficient

WIZZ AIR  GEELY AUTOMOBILE

Very weak diversification

The 3 months correlation between WIZZ and GEELY is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding WIZZ AIR HLDGUNSPADR4 and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE and WIZZ AIR 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 WIZZ AIR HLDGUNSPADR4 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 WIZZ AIR i.e., WIZZ AIR and GEELY AUTOMOBILE go up and down completely randomly.

Pair Corralation between WIZZ AIR and GEELY AUTOMOBILE

Assuming the 90 days trading horizon WIZZ AIR HLDGUNSPADR4 is expected to under-perform the GEELY AUTOMOBILE. In addition to that, WIZZ AIR is 1.31 times more volatile than GEELY AUTOMOBILE. It trades about 0.0 of its total potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about 0.14 per unit of volatility. If you would invest  73.00  in GEELY AUTOMOBILE on September 20, 2024 and sell it today you would earn a total of  118.00  from holding GEELY AUTOMOBILE or generate 161.64% return on investment over 90 days.

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

WIZZ AIR HLDGUNSPADR4  vs.  GEELY AUTOMOBILE

WIZZ AIR HLDGUNSPADR4

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WIZZ AIR HLDGUNSPADR4 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, WIZZ AIR reported solid returns over the last few months and may actually be approaching a breakup point.

GEELY AUTOMOBILE

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GEELY AUTOMOBILE are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, GEELY AUTOMOBILE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WIZZ AIR and GEELY AUTOMOBILE

The main advantage of trading using opposite WIZZ AIR and GEELY AUTOMOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIZZ AIR 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 WIZZ AIR HLDGUNSPADR4 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.