Correlation Between Guangzhou Dongfang and BYD Co
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By analyzing existing cross correlation between Guangzhou Dongfang Hotel and BYD Co Ltd, you can compare the effects of market volatilities on Guangzhou Dongfang 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 Guangzhou Dongfang with a short position of BYD Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Dongfang and BYD Co.
Diversification Opportunities for Guangzhou Dongfang and BYD Co
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangzhou and BYD is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Dongfang Hotel and BYD Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYD Co and Guangzhou Dongfang 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 Guangzhou Dongfang Hotel 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 Guangzhou Dongfang i.e., Guangzhou Dongfang and BYD Co go up and down completely randomly.
Pair Corralation between Guangzhou Dongfang and BYD Co
Assuming the 90 days trading horizon Guangzhou Dongfang Hotel is expected to generate 1.13 times more return on investment than BYD Co. However, Guangzhou Dongfang is 1.13 times more volatile than BYD Co Ltd. It trades about 0.16 of its potential returns per unit of risk. BYD Co Ltd is currently generating about 0.05 per unit of risk. If you would invest 902.00 in Guangzhou Dongfang Hotel on November 6, 2024 and sell it today you would earn a total of 43.00 from holding Guangzhou Dongfang Hotel or generate 4.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Dongfang Hotel vs. BYD Co Ltd
Performance |
| Timeline |
| Guangzhou Dongfang Hotel |
| BYD Co |
Guangzhou Dongfang and BYD Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Dongfang and BYD Co
The main advantage of trading using opposite Guangzhou Dongfang and BYD Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Dongfang 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.| Guangzhou Dongfang vs. V V Food | Guangzhou Dongfang vs. Shanghai Ziyan Foods | Guangzhou Dongfang vs. Dongfeng Automobile Co | Guangzhou Dongfang vs. HaiXin Foods Co |
| BYD Co vs. Hongrun Construction Group | BYD Co vs. Changchun Engley Automobile | BYD Co vs. Anhui Jianghuai Automobile | BYD Co vs. Shenzhen Zhongzhuang Construction |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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