Correlation Between BYD Co and Weihai Honglin
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By analyzing existing cross correlation between BYD Co Ltd and Weihai Honglin Electronic, you can compare the effects of market volatilities on BYD Co and Weihai Honglin 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 Weihai Honglin. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Weihai Honglin.
Diversification Opportunities for BYD Co and Weihai Honglin
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BYD and Weihai is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Weihai Honglin Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weihai Honglin Electronic 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 Weihai Honglin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weihai Honglin Electronic has no effect on the direction of BYD Co i.e., BYD Co and Weihai Honglin go up and down completely randomly.
Pair Corralation between BYD Co and Weihai Honglin
Assuming the 90 days trading horizon BYD Co is expected to generate 9.54 times less return on investment than Weihai Honglin. But when comparing it to its historical volatility, BYD Co Ltd is 2.89 times less risky than Weihai Honglin. It trades about 0.06 of its potential returns per unit of risk. Weihai Honglin Electronic is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,406 in Weihai Honglin Electronic on November 4, 2024 and sell it today you would earn a total of 201.00 from holding Weihai Honglin Electronic or generate 14.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYD Co Ltd vs. Weihai Honglin Electronic
Performance |
| Timeline |
| BYD Co |
| Weihai Honglin Electronic |
BYD Co and Weihai Honglin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and Weihai Honglin
The main advantage of trading using opposite BYD Co and Weihai Honglin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Weihai Honglin 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 Weihai Honglin will offset losses from the drop in Weihai Honglin'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 |
| Weihai Honglin vs. Shenzhen Noposion Agrochemicals | Weihai Honglin vs. Guangdong Qunxing Toys | Weihai Honglin vs. Guangdong Jingyi Metal | Weihai Honglin vs. Harvest Fund Management |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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