Correlation Between BYD Co and Sunny Loan
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By analyzing existing cross correlation between BYD Co Ltd and Sunny Loan Top, you can compare the effects of market volatilities on BYD Co and Sunny Loan 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 Sunny Loan. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Sunny Loan.
Diversification Opportunities for BYD Co and Sunny Loan
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BYD and Sunny is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Sunny Loan Top in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Loan Top 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 Sunny Loan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Loan Top has no effect on the direction of BYD Co i.e., BYD Co and Sunny Loan go up and down completely randomly.
Pair Corralation between BYD Co and Sunny Loan
Assuming the 90 days trading horizon BYD Co is expected to generate 3.27 times less return on investment than Sunny Loan. But when comparing it to its historical volatility, BYD Co Ltd is 1.76 times less risky than Sunny Loan. It trades about 0.04 of its potential returns per unit of risk. Sunny Loan Top is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 657.00 in Sunny Loan Top on September 14, 2024 and sell it today you would earn a total of 516.00 from holding Sunny Loan Top or generate 78.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 99.62% |
Values | Daily Returns |
BYD Co Ltd vs. Sunny Loan Top
Performance |
Timeline |
BYD Co |
Sunny Loan Top |
BYD Co and Sunny Loan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BYD Co and Sunny Loan
The main advantage of trading using opposite BYD Co and Sunny Loan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Sunny Loan 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 Sunny Loan will offset losses from the drop in Sunny Loan's long position.BYD Co vs. Yonyou Auto Information | BYD Co vs. Anhui Jianghuai Automobile | BYD Co vs. Digital China Information | BYD Co vs. Zhongtong Guomai Communication |
Sunny Loan vs. Kweichow Moutai Co | Sunny Loan vs. Contemporary Amperex Technology | Sunny Loan vs. G bits Network Technology | Sunny Loan vs. BYD Co Ltd |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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