Correlation Between Geely Automobile and CANON MARKETING

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

By analyzing existing cross correlation between Geely Automobile Holdings and CANON MARKETING JP, you can compare the effects of market volatilities on Geely Automobile and CANON MARKETING 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 CANON MARKETING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and CANON MARKETING.

Diversification Opportunities for Geely Automobile and CANON MARKETING

0.06

Correlation Coefficient

Geely Automobile  CANON MARKETING

Significant diversification

The 3 months correlation between Geely and CANON is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and CANON MARKETING JP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CANON MARKETING JP 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 Holdings are associated (or correlated) with CANON MARKETING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CANON MARKETING JP has no effect on the direction of Geely Automobile i.e., Geely Automobile and CANON MARKETING go up and down completely randomly.

Pair Corralation between Geely Automobile and CANON MARKETING

Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 2.06 times more return on investment than CANON MARKETING. However, Geely Automobile is 2.06 times more volatile than CANON MARKETING JP. It trades about 0.15 of its potential returns per unit of risk. CANON MARKETING JP is currently generating about 0.02 per unit of risk. If you would invest  156.00  in Geely Automobile Holdings on April 24, 2025 and sell it today you would earn a total of  47.00  from holding Geely Automobile Holdings or generate 30.13% return on investment over 90 days.

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

Geely Automobile Holdings  vs.  CANON MARKETING JP

Geely Automobile Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Geely Automobile Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Geely Automobile reported solid returns over the last few months and may actually be approaching a breakup point.

CANON MARKETING JP

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CANON MARKETING JP are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward-looking indicators, CANON MARKETING is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Geely Automobile and CANON MARKETING

The main advantage of trading using opposite Geely Automobile and CANON MARKETING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, CANON MARKETING 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 CANON MARKETING will offset losses from the drop in CANON MARKETING's long position.

The idea behind Geely Automobile Holdings and CANON MARKETING JP 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.