Correlation Between BYD Co and Dongnan Electronics
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By analyzing existing cross correlation between BYD Co Ltd and Dongnan Electronics Co, you can compare the effects of market volatilities on BYD Co and Dongnan Electronics 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 Dongnan Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Dongnan Electronics.
Diversification Opportunities for BYD Co and Dongnan Electronics
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BYD and Dongnan is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Dongnan Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongnan Electronics 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 Dongnan Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongnan Electronics has no effect on the direction of BYD Co i.e., BYD Co and Dongnan Electronics go up and down completely randomly.
Pair Corralation between BYD Co and Dongnan Electronics
Assuming the 90 days trading horizon BYD Co is expected to generate 1.36 times less return on investment than Dongnan Electronics. But when comparing it to its historical volatility, BYD Co Ltd is 1.73 times less risky than Dongnan Electronics. It trades about 0.07 of its potential returns per unit of risk. Dongnan Electronics Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,627 in Dongnan Electronics Co on October 14, 2024 and sell it today you would earn a total of 468.00 from holding Dongnan Electronics Co or generate 28.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYD Co Ltd vs. Dongnan Electronics Co
Performance |
| Timeline |
| BYD Co |
| Dongnan Electronics |
BYD Co and Dongnan Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and Dongnan Electronics
The main advantage of trading using opposite BYD Co and Dongnan Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Dongnan Electronics 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 Dongnan Electronics will offset losses from the drop in Dongnan Electronics' long position.| BYD Co vs. Suzhou Oriental Semiconductor | BYD Co vs. FSPG Hi Tech Co | BYD Co vs. Runjian Communication Co | BYD Co vs. GRINM Semiconductor Materials |
| Dongnan Electronics vs. China Petroleum Chemical | Dongnan Electronics vs. PetroChina Co Ltd | Dongnan Electronics vs. China State Construction | Dongnan Electronics vs. China Railway Group |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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