Correlation Between BYD Co and Huafa Industrial
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By analyzing existing cross correlation between BYD Co Ltd and Huafa Industrial Co, you can compare the effects of market volatilities on BYD Co and Huafa Industrial 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 Huafa Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Huafa Industrial.
Diversification Opportunities for BYD Co and Huafa Industrial
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BYD and Huafa is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Huafa Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huafa Industrial 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 Huafa Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huafa Industrial has no effect on the direction of BYD Co i.e., BYD Co and Huafa Industrial go up and down completely randomly.
Pair Corralation between BYD Co and Huafa Industrial
Assuming the 90 days trading horizon BYD Co Ltd is expected to under-perform the Huafa Industrial. In addition to that, BYD Co is 1.02 times more volatile than Huafa Industrial Co. It trades about -0.25 of its total potential returns per unit of risk. Huafa Industrial Co is currently generating about -0.1 per unit of volatility. If you would invest 690.00 in Huafa Industrial Co on August 31, 2024 and sell it today you would lose (31.00) from holding Huafa Industrial Co or give up 4.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYD Co Ltd vs. Huafa Industrial Co
Performance |
| Timeline |
| BYD Co |
| Huafa Industrial |
BYD Co and Huafa Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and Huafa Industrial
The main advantage of trading using opposite BYD Co and Huafa Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Huafa Industrial 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 Huafa Industrial will offset losses from the drop in Huafa Industrial's long position.| BYD Co vs. Kingclean Electric Co | BYD Co vs. Keda Clean Energy | BYD Co vs. CSSC Offshore Marine | BYD Co vs. Dhc Software Co |
| Huafa Industrial vs. Kweichow Moutai Co | Huafa Industrial vs. Contemporary Amperex Technology | Huafa Industrial vs. G bits Network Technology | Huafa Industrial vs. BYD Co Ltd |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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