Correlation Between BYD Co and China Great
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By analyzing existing cross correlation between BYD Co Ltd and China Great Wall, you can compare the effects of market volatilities on BYD Co and China Great 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 BYD Co with a short position of China Great. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and China Great.
Diversification Opportunities for BYD Co and China Great
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BYD and China is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and China Great Wall in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Great Wall and BYD Co 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 BYD Co Ltd are associated (or correlated) with China Great. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Great Wall has no effect on the direction of BYD Co i.e., BYD Co and China Great go up and down completely randomly.
Pair Corralation between BYD Co and China Great
Assuming the 90 days trading horizon BYD Co Ltd is expected to under-perform the China Great. In addition to that, BYD Co is 1.11 times more volatile than China Great Wall. It trades about -0.02 of its total potential returns per unit of risk. China Great Wall is currently generating about 0.06 per unit of volatility. If you would invest 821.00 in China Great Wall on September 25, 2024 and sell it today you would earn a total of 12.00 from holding China Great Wall or generate 1.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
BYD Co Ltd vs. China Great Wall
Performance |
Timeline |
BYD Co |
China Great Wall |
BYD Co and China Great Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BYD Co and China Great
The main advantage of trading using opposite BYD Co and China Great positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, China Great 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 China Great will offset losses from the drop in China Great's long position.BYD Co vs. Invengo Information Technology | BYD Co vs. Longmaster Information Tech | BYD Co vs. Guangzhou KingTeller Technology | BYD Co vs. Linewell Software Co |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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