Correlation Between BYD Co and Shenwu Energy
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By analyzing existing cross correlation between BYD Co Ltd and Shenwu Energy Saving, you can compare the effects of market volatilities on BYD Co and Shenwu Energy 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 Shenwu Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Shenwu Energy.
Diversification Opportunities for BYD Co and Shenwu Energy
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BYD and Shenwu is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Shenwu Energy Saving in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenwu Energy Saving 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 Shenwu Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenwu Energy Saving has no effect on the direction of BYD Co i.e., BYD Co and Shenwu Energy go up and down completely randomly.
Pair Corralation between BYD Co and Shenwu Energy
Assuming the 90 days trading horizon BYD Co Ltd is expected to generate 0.22 times more return on investment than Shenwu Energy. However, BYD Co Ltd is 4.57 times less risky than Shenwu Energy. It trades about 0.06 of its potential returns per unit of risk. Shenwu Energy Saving is currently generating about 0.01 per unit of risk. If you would invest 27,073 in BYD Co Ltd on November 4, 2024 and sell it today you would earn a total of 377.00 from holding BYD Co Ltd or generate 1.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYD Co Ltd vs. Shenwu Energy Saving
Performance |
| Timeline |
| BYD Co |
| Shenwu Energy Saving |
BYD Co and Shenwu Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and Shenwu Energy
The main advantage of trading using opposite BYD Co and Shenwu Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Shenwu Energy 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 Shenwu Energy will offset losses from the drop in Shenwu Energy's long position.| BYD Co vs. Maccura Biotechnology Co | BYD Co vs. Jiangsu GDK Biotechnology | BYD Co vs. Chongqing Brewery Co | BYD Co vs. Shenzhen Bioeasy Biotechnology |
| Shenwu Energy vs. Nanjing Putian Telecommunications | Shenwu Energy vs. Ping An Insurance | Shenwu Energy vs. Fiberhome Telecommunication Technologies | Shenwu Energy vs. Guangxi Wuzhou Communications |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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