Correlation Between Ningbo Fujia and BYD Co
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By analyzing existing cross correlation between Ningbo Fujia Industrial and BYD Co Ltd, you can compare the effects of market volatilities on Ningbo Fujia and BYD Co 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 Ningbo Fujia with a short position of BYD Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fujia and BYD Co.
Diversification Opportunities for Ningbo Fujia and BYD Co
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ningbo and BYD is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fujia Industrial and BYD Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYD Co and Ningbo Fujia 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 Ningbo Fujia Industrial are associated (or correlated) with BYD Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BYD Co has no effect on the direction of Ningbo Fujia i.e., Ningbo Fujia and BYD Co go up and down completely randomly.
Pair Corralation between Ningbo Fujia and BYD Co
Assuming the 90 days trading horizon Ningbo Fujia Industrial is expected to generate 1.73 times more return on investment than BYD Co. However, Ningbo Fujia is 1.73 times more volatile than BYD Co Ltd. It trades about 0.02 of its potential returns per unit of risk. BYD Co Ltd is currently generating about -0.1 per unit of risk. If you would invest 1,463 in Ningbo Fujia Industrial on October 2, 2024 and sell it today you would earn a total of 21.00 from holding Ningbo Fujia Industrial or generate 1.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ningbo Fujia Industrial vs. BYD Co Ltd
Performance |
Timeline |
Ningbo Fujia Industrial |
BYD Co |
Ningbo Fujia and BYD Co Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ningbo Fujia and BYD Co
The main advantage of trading using opposite Ningbo Fujia and BYD Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fujia position performs unexpectedly, BYD Co 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 BYD Co will offset losses from the drop in BYD Co's long position.Ningbo Fujia vs. China Life Insurance | Ningbo Fujia vs. National Silicon Industry | Ningbo Fujia vs. Gansu Jiu Steel | Ningbo Fujia vs. Shandong Mining Machinery |
BYD Co vs. China Life Insurance | BYD Co vs. National Silicon Industry | BYD Co vs. Gansu Jiu Steel | BYD Co vs. Shandong Mining Machinery |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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