Correlation Between BYD Co and Guangxi Guiguan
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By analyzing existing cross correlation between BYD Co Ltd and Guangxi Guiguan Electric, you can compare the effects of market volatilities on BYD Co and Guangxi Guiguan 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 Guangxi Guiguan. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Guangxi Guiguan.
Diversification Opportunities for BYD Co and Guangxi Guiguan
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BYD and Guangxi is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Guangxi Guiguan Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangxi Guiguan Electric 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 Guangxi Guiguan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangxi Guiguan Electric has no effect on the direction of BYD Co i.e., BYD Co and Guangxi Guiguan go up and down completely randomly.
Pair Corralation between BYD Co and Guangxi Guiguan
Assuming the 90 days trading horizon BYD Co Ltd is expected to generate 1.44 times more return on investment than Guangxi Guiguan. However, BYD Co is 1.44 times more volatile than Guangxi Guiguan Electric. It trades about 0.13 of its potential returns per unit of risk. Guangxi Guiguan Electric is currently generating about -0.04 per unit of risk. If you would invest 23,485 in BYD Co Ltd on August 29, 2024 and sell it today you would earn a total of 4,616 from holding BYD Co Ltd or generate 19.66% 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. Guangxi Guiguan Electric
Performance |
| Timeline |
| BYD Co |
| Guangxi Guiguan Electric |
BYD Co and Guangxi Guiguan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and Guangxi Guiguan
The main advantage of trading using opposite BYD Co and Guangxi Guiguan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Guangxi Guiguan 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 Guangxi Guiguan will offset losses from the drop in Guangxi Guiguan's long position.| BYD Co vs. Guangzhou Jointas Chemical | BYD Co vs. Glodon Software Co | BYD Co vs. Longxing Chemical Stock | BYD Co vs. Xilong Chemical Co |
| Guangxi Guiguan vs. Yonyou Auto Information | Guangxi Guiguan vs. Keeson Technology Corp | Guangxi Guiguan vs. Vontron Technology Co | Guangxi Guiguan vs. Invengo Information Technology |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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