Correlation Between BYD Co and Changjiang Jinggong
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By analyzing existing cross correlation between BYD Co Ltd and Changjiang Jinggong Steel, you can compare the effects of market volatilities on BYD Co and Changjiang Jinggong 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 Changjiang Jinggong. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Changjiang Jinggong.
Diversification Opportunities for BYD Co and Changjiang Jinggong
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between BYD and Changjiang is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Changjiang Jinggong Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changjiang Jinggong Steel 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 Changjiang Jinggong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changjiang Jinggong Steel has no effect on the direction of BYD Co i.e., BYD Co and Changjiang Jinggong go up and down completely randomly.
Pair Corralation between BYD Co and Changjiang Jinggong
Assuming the 90 days trading horizon BYD Co Ltd is expected to generate 1.2 times more return on investment than Changjiang Jinggong. However, BYD Co is 1.2 times more volatile than Changjiang Jinggong Steel. It trades about -0.1 of its potential returns per unit of risk. Changjiang Jinggong Steel is currently generating about -0.28 per unit of risk. If you would invest 28,842 in BYD Co Ltd on October 25, 2024 and sell it today you would lose (1,131) from holding BYD Co Ltd or give up 3.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
BYD Co Ltd vs. Changjiang Jinggong Steel
Performance |
| Timeline |
| BYD Co |
| Changjiang Jinggong Steel |
BYD Co and Changjiang Jinggong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and Changjiang Jinggong
The main advantage of trading using opposite BYD Co and Changjiang Jinggong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Changjiang Jinggong 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 Changjiang Jinggong will offset losses from the drop in Changjiang Jinggong's long position.| BYD Co vs. HeBei Jinniu Chemical | BYD Co vs. Maoming Petro Chemical Shihua | BYD Co vs. TongFu Microelectronics Co | BYD Co vs. Hengli Petrochemical Co |
| Changjiang Jinggong vs. Kweichow Moutai Co | Changjiang Jinggong vs. Contemporary Amperex Technology | Changjiang Jinggong vs. Beijing Roborock Technology | Changjiang Jinggong 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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