Correlation Between BYD Co and GASBCM

Can any of the company-specific risk be diversified away by investing in both BYD Co and GASBCM 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 GASBCM 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 GASBCM 6129 23 FEB 38, you can compare the effects of market volatilities on BYD Co and GASBCM 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 GASBCM. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and GASBCM.

Diversification Opportunities for BYD Co and GASBCM

-0.4

Correlation Coefficient

BYD Co  GASBCM

Very good diversification

The 3 months correlation between BYD and GASBCM is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and GASBCM 6129 23 FEB 38 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GASBCM 6129 23 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 GASBCM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GASBCM 6129 23 has no effect on the direction of BYD Co i.e., BYD Co and GASBCM go up and down completely randomly.

Pair Corralation between BYD Co and GASBCM

Assuming the 90 days horizon BYD Co Ltd is expected to under-perform the GASBCM. But the pink sheet apears to be less risky and, when comparing its historical volatility, BYD Co Ltd is 1.42 times less risky than GASBCM. The pink sheet trades about -0.3 of its potential returns per unit of risk. The GASBCM 6129 23 FEB 38 is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  10,216  in GASBCM 6129 23 FEB 38 on October 13, 2024 and sell it today you would lose (26.00) from holding GASBCM 6129 23 FEB 38 or give up 0.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	21.05%
Values	Daily Returns

BYD Co Ltd  vs.  GASBCM 6129 23 FEB 38

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.

GASBCM 6129 23

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GASBCM 6129 23 FEB 38 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for GASBCM 6129 23 FEB 38 investors.

Pair Trading with BYD Co and GASBCM

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

The idea behind BYD Co Ltd and GASBCM 6129 23 FEB 38 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 Anywhere module to track or share privately all of your investments from the convenience of any device.