Correlation Between Jilin Chemical and BYD Co
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By analyzing existing cross correlation between Jilin Chemical Fibre and BYD Co Ltd, you can compare the effects of market volatilities on Jilin Chemical 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 Jilin Chemical with a short position of BYD Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jilin Chemical and BYD Co.
Diversification Opportunities for Jilin Chemical and BYD Co
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jilin and BYD is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Jilin Chemical Fibre and BYD Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYD Co and Jilin Chemical 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 Jilin Chemical Fibre 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 Jilin Chemical i.e., Jilin Chemical and BYD Co go up and down completely randomly.
Pair Corralation between Jilin Chemical and BYD Co
Assuming the 90 days trading horizon Jilin Chemical Fibre is expected to generate 1.98 times more return on investment than BYD Co. However, Jilin Chemical is 1.98 times more volatile than BYD Co Ltd. It trades about 0.21 of its potential returns per unit of risk. BYD Co Ltd is currently generating about -0.18 per unit of risk. If you would invest 336.00 in Jilin Chemical Fibre on August 24, 2024 and sell it today you would earn a total of 57.00 from holding Jilin Chemical Fibre or generate 16.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jilin Chemical Fibre vs. BYD Co Ltd
Performance |
| Timeline |
| Jilin Chemical Fibre |
| BYD Co |
Jilin Chemical and BYD Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jilin Chemical and BYD Co
The main advantage of trading using opposite Jilin Chemical and BYD Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jilin Chemical 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.| Jilin Chemical vs. Zijin Mining Group | Jilin Chemical vs. Wanhua Chemical Group | Jilin Chemical vs. Baoshan Iron Steel | Jilin Chemical vs. Shandong Gold Mining |
| BYD Co vs. Southchip Semiconductor Technology | BYD Co vs. Semiconductor Manufacturing Electronics | BYD Co vs. Jilin Chemical Fibre | BYD Co vs. Juewei Food Co |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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