Correlation Between BYD Co and Guangzhou Haozhi
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By analyzing existing cross correlation between BYD Co Ltd and Guangzhou Haozhi Industrial, you can compare the effects of market volatilities on BYD Co and Guangzhou Haozhi 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 Guangzhou Haozhi. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Guangzhou Haozhi.
Diversification Opportunities for BYD Co and Guangzhou Haozhi
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BYD and Guangzhou is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Guangzhou Haozhi Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Haozhi Ind 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 Guangzhou Haozhi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Haozhi Ind has no effect on the direction of BYD Co i.e., BYD Co and Guangzhou Haozhi go up and down completely randomly.
Pair Corralation between BYD Co and Guangzhou Haozhi
Assuming the 90 days trading horizon BYD Co Ltd is expected to under-perform the Guangzhou Haozhi. But the stock apears to be less risky and, when comparing its historical volatility, BYD Co Ltd is 2.74 times less risky than Guangzhou Haozhi. The stock trades about -0.07 of its potential returns per unit of risk. The Guangzhou Haozhi Industrial is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,635 in Guangzhou Haozhi Industrial on October 23, 2024 and sell it today you would earn a total of 528.00 from holding Guangzhou Haozhi Industrial or generate 32.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BYD Co Ltd vs. Guangzhou Haozhi Industrial
Performance |
Timeline |
BYD Co |
Guangzhou Haozhi Ind |
BYD Co and Guangzhou Haozhi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BYD Co and Guangzhou Haozhi
The main advantage of trading using opposite BYD Co and Guangzhou Haozhi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Guangzhou Haozhi 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 Guangzhou Haozhi will offset losses from the drop in Guangzhou Haozhi's long position.BYD Co vs. Ningbo MedicalSystem Biotechnology | BYD Co vs. Citic Offshore Helicopter | BYD Co vs. Bank of Suzhou | BYD Co vs. China Everbright Bank |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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