Correlation Between Fujian Newland and BYD Co
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By analyzing existing cross correlation between Fujian Newland Computer and BYD Co Ltd, you can compare the effects of market volatilities on Fujian Newland 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 Fujian Newland with a short position of BYD Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Newland and BYD Co.
Diversification Opportunities for Fujian Newland and BYD Co
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fujian and BYD is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Newland Computer and BYD Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYD Co and Fujian Newland 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 Fujian Newland Computer 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 Fujian Newland i.e., Fujian Newland and BYD Co go up and down completely randomly.
Pair Corralation between Fujian Newland and BYD Co
Assuming the 90 days trading horizon Fujian Newland Computer is expected to generate 2.41 times more return on investment than BYD Co. However, Fujian Newland is 2.41 times more volatile than BYD Co Ltd. It trades about 0.09 of its potential returns per unit of risk. BYD Co Ltd is currently generating about -0.19 per unit of risk. If you would invest 2,047 in Fujian Newland Computer on September 12, 2024 and sell it today you would earn a total of 115.00 from holding Fujian Newland Computer or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Newland Computer vs. BYD Co Ltd
Performance |
| Timeline |
| Fujian Newland Computer |
| BYD Co |
Fujian Newland and BYD Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Newland and BYD Co
The main advantage of trading using opposite Fujian Newland and BYD Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Newland 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.| Fujian Newland vs. Gansu Jiu Steel | Fujian Newland vs. Shandong Mining Machinery | Fujian Newland vs. Aba Chemicals Corp | Fujian Newland vs. BlueFocus Communication Group |
| BYD Co vs. Aluminum Corp of | BYD Co vs. Sino Platinum Metals Co | BYD Co vs. Shandong Publishing Media | BYD Co vs. Changjiang Publishing Media |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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