Correlation Between BYD Co and XCMG Construction
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By analyzing existing cross correlation between BYD Co Ltd and XCMG Construction Machinery, you can compare the effects of market volatilities on BYD Co and XCMG Construction 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 XCMG Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and XCMG Construction.
Diversification Opportunities for BYD Co and XCMG Construction
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BYD and XCMG is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and XCMG Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XCMG Construction 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 XCMG Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XCMG Construction has no effect on the direction of BYD Co i.e., BYD Co and XCMG Construction go up and down completely randomly.
Pair Corralation between BYD Co and XCMG Construction
Assuming the 90 days trading horizon BYD Co Ltd is expected to under-perform the XCMG Construction. In addition to that, BYD Co is 1.02 times more volatile than XCMG Construction Machinery. It trades about -0.07 of its total potential returns per unit of risk. XCMG Construction Machinery is currently generating about -0.02 per unit of volatility. If you would invest 767.00 in XCMG Construction Machinery on October 28, 2024 and sell it today you would lose (7.00) from holding XCMG Construction Machinery or give up 0.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYD Co Ltd vs. XCMG Construction Machinery
Performance |
| Timeline |
| BYD Co |
| XCMG Construction |
BYD Co and XCMG Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and XCMG Construction
The main advantage of trading using opposite BYD Co and XCMG Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, XCMG Construction 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 XCMG Construction will offset losses from the drop in XCMG Construction's long position.| BYD Co vs. Thunder Software Technology | BYD Co vs. Huatian Hotel Group | BYD Co vs. Hubei Tech Semiconductors | BYD Co vs. Guangzhou Dongfang Hotel |
| XCMG Construction vs. Jiangsu Jinling Sports | XCMG Construction vs. Caihong Display Devices | XCMG Construction vs. Harbin Hatou Investment | XCMG Construction vs. Shanghai Jinfeng Wine |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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