Correlation Between BYD Co and Road Environment
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By analyzing existing cross correlation between BYD Co Ltd and Road Environment Technology, you can compare the effects of market volatilities on BYD Co and Road Environment 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 Road Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Road Environment.
Diversification Opportunities for BYD Co and Road Environment
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between BYD and Road is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Road Environment Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Road Environment Tec 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 Road Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Road Environment Tec has no effect on the direction of BYD Co i.e., BYD Co and Road Environment go up and down completely randomly.
Pair Corralation between BYD Co and Road Environment
Assuming the 90 days trading horizon BYD Co Ltd is expected to generate 0.68 times more return on investment than Road Environment. However, BYD Co Ltd is 1.48 times less risky than Road Environment. It trades about 0.08 of its potential returns per unit of risk. Road Environment Technology is currently generating about -0.05 per unit of risk. If you would invest 18,798 in BYD Co Ltd on October 6, 2024 and sell it today you would earn a total of 8,275 from holding BYD Co Ltd or generate 44.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
BYD Co Ltd vs. Road Environment Technology
Performance |
Timeline |
BYD Co |
Road Environment Tec |
BYD Co and Road Environment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BYD Co and Road Environment
The main advantage of trading using opposite BYD Co and Road Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Road Environment 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 Road Environment will offset losses from the drop in Road Environment's long position.BYD Co vs. Shantui Construction Machinery | BYD Co vs. Ningbo Kangqiang Electronics | BYD Co vs. TongFu Microelectronics Co | BYD Co vs. Hunan Tyen Machinery |
Road Environment vs. Qilu Bank Co | Road Environment vs. Mengtian Home Group | Road Environment vs. Nanxing Furniture Machinery | Road Environment vs. Vohringer Home Technology |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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