Correlation Between GEELY AUTOMOBILE and UNITED UTILITIES
Can any of the company-specific risk be diversified away by investing in both GEELY AUTOMOBILE and UNITED UTILITIES 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 UNITED UTILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEELY AUTOMOBILE and UNITED UTILITIES GR, you can compare the effects of market volatilities on GEELY AUTOMOBILE and UNITED UTILITIES 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 UNITED UTILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEELY AUTOMOBILE and UNITED UTILITIES.
Diversification Opportunities for GEELY AUTOMOBILE and UNITED UTILITIES
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GEELY and UNITED is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding GEELY AUTOMOBILE and UNITED UTILITIES GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED UTILITIES 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 UNITED UTILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED UTILITIES has no effect on the direction of GEELY AUTOMOBILE i.e., GEELY AUTOMOBILE and UNITED UTILITIES go up and down completely randomly.
Pair Corralation between GEELY AUTOMOBILE and UNITED UTILITIES
Assuming the 90 days trading horizon GEELY AUTOMOBILE is expected to generate 3.08 times more return on investment than UNITED UTILITIES. However, GEELY AUTOMOBILE is 3.08 times more volatile than UNITED UTILITIES GR. It trades about 0.26 of its potential returns per unit of risk. UNITED UTILITIES GR is currently generating about 0.06 per unit of risk. If you would invest 105.00 in GEELY AUTOMOBILE on September 14, 2024 and sell it today you would earn a total of 90.00 from holding GEELY AUTOMOBILE or generate 85.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
GEELY AUTOMOBILE vs. UNITED UTILITIES GR
Performance |
Timeline |
GEELY AUTOMOBILE |
UNITED UTILITIES |
GEELY AUTOMOBILE and UNITED UTILITIES Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GEELY AUTOMOBILE and UNITED UTILITIES
The main advantage of trading using opposite GEELY AUTOMOBILE and UNITED UTILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEELY AUTOMOBILE position performs unexpectedly, UNITED UTILITIES 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 UNITED UTILITIES will offset losses from the drop in UNITED UTILITIES's long position.GEELY AUTOMOBILE vs. Apple Inc | GEELY AUTOMOBILE vs. Apple Inc | GEELY AUTOMOBILE vs. Apple Inc | GEELY AUTOMOBILE vs. Apple Inc |
UNITED UTILITIES vs. National Retail Properties | UNITED UTILITIES vs. QURATE RETAIL INC | UNITED UTILITIES vs. Sumitomo Rubber Industries | UNITED UTILITIES vs. GOODYEAR T RUBBER |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |