Correlation Between BYD Co and Ggtoor

Can any of the company-specific risk be diversified away by investing in both BYD Co and Ggtoor at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining BYD Co and Ggtoor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BYD Co Ltd and Ggtoor Inc, you can compare the effects of market volatilities on BYD Co and Ggtoor 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 Ggtoor. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Ggtoor.

Diversification Opportunities for BYD Co and Ggtoor

-0.32

Correlation Coefficient

BYD Co  Ggtoor

Very good diversification

The 3 months correlation between BYD and Ggtoor is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Ggtoor Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ggtoor Inc 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 Ggtoor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ggtoor Inc has no effect on the direction of BYD Co i.e., BYD Co and Ggtoor go up and down completely randomly.

Pair Corralation between BYD Co and Ggtoor

Assuming the 90 days horizon BYD Co is expected to generate 46.02 times less return on investment than Ggtoor. But when comparing it to its historical volatility, BYD Co Ltd is 21.38 times less risky than Ggtoor. It trades about 0.03 of its potential returns per unit of risk. Ggtoor Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  0.39  in Ggtoor Inc on October 3, 2024 and sell it today you would lose (0.38) from holding Ggtoor Inc or give up 97.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

BYD Co Ltd  vs.  Ggtoor Inc

BYD Co

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BYD Co Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Ggtoor Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ggtoor Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Ggtoor reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BYD Co and Ggtoor

The main advantage of trading using opposite BYD Co and Ggtoor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Ggtoor 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 Ggtoor will offset losses from the drop in Ggtoor's long position.

The idea behind BYD Co Ltd and Ggtoor Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.