Correlation Between Geely Automobile and STUDSVIK

Can any of the company-specific risk be diversified away by investing in both Geely Automobile and STUDSVIK 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 STUDSVIK 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 STUDSVIK, you can compare the effects of market volatilities on Geely Automobile and STUDSVIK 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 STUDSVIK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and STUDSVIK.

Diversification Opportunities for Geely Automobile and STUDSVIK

0.54

Correlation Coefficient

Geely Automobile  STUDSVIK

Very weak diversification

The 3 months correlation between Geely and STUDSVIK is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and STUDSVIK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STUDSVIK 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 STUDSVIK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STUDSVIK has no effect on the direction of Geely Automobile i.e., Geely Automobile and STUDSVIK go up and down completely randomly.

Pair Corralation between Geely Automobile and STUDSVIK

Assuming the 90 days horizon Geely Automobile is expected to generate 1.38 times less return on investment than STUDSVIK. But when comparing it to its historical volatility, Geely Automobile Holdings is 1.18 times less risky than STUDSVIK. It trades about 0.15 of its potential returns per unit of risk. STUDSVIK is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,182  in STUDSVIK on April 24, 2025 and sell it today you would earn a total of  518.00  from holding STUDSVIK or generate 43.82% return on investment over 90 days.

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

Geely Automobile Holdings  vs.  STUDSVIK

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.

STUDSVIK

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in STUDSVIK are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, STUDSVIK exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Geely Automobile and STUDSVIK

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

The idea behind Geely Automobile Holdings and STUDSVIK 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 CEOs Directory module to screen CEOs from public companies around the world.