Correlation Between BYD Co and Wanda Cinema
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By analyzing existing cross correlation between BYD Co Ltd and Wanda Cinema Line, you can compare the effects of market volatilities on BYD Co and Wanda Cinema 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 Wanda Cinema. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Wanda Cinema.
Diversification Opportunities for BYD Co and Wanda Cinema
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BYD and Wanda is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Wanda Cinema Line in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wanda Cinema Line 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 Wanda Cinema. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wanda Cinema Line has no effect on the direction of BYD Co i.e., BYD Co and Wanda Cinema go up and down completely randomly.
Pair Corralation between BYD Co and Wanda Cinema
Assuming the 90 days trading horizon BYD Co Ltd is expected to generate 0.8 times more return on investment than Wanda Cinema. However, BYD Co Ltd is 1.25 times less risky than Wanda Cinema. It trades about 0.07 of its potential returns per unit of risk. Wanda Cinema Line is currently generating about 0.01 per unit of risk. If you would invest 23,786 in BYD Co Ltd on September 3, 2024 and sell it today you would earn a total of 4,454 from holding BYD Co Ltd or generate 18.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYD Co Ltd vs. Wanda Cinema Line
Performance |
| Timeline |
| BYD Co |
| Wanda Cinema Line |
BYD Co and Wanda Cinema Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and Wanda Cinema
The main advantage of trading using opposite BYD Co and Wanda Cinema positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Wanda Cinema 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 Wanda Cinema will offset losses from the drop in Wanda Cinema's long position.| BYD Co vs. Bus Online Co | BYD Co vs. Zhangjiagang Freetrade Science | BYD Co vs. Vontron Technology Co | BYD Co vs. Tianshui Huatian Technology |
| Wanda Cinema vs. Shanghai Shuixing Home | Wanda Cinema vs. Sinomach Automobile Co | Wanda Cinema vs. Easyhome New Retail | Wanda Cinema vs. Chongqing Changan Automobile |
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 CEOs Directory module to screen CEOs from public companies around the world.
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