Correlation Between BYD Co and Tengda Construction
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By analyzing existing cross correlation between BYD Co Ltd and Tengda Construction Group, you can compare the effects of market volatilities on BYD Co and Tengda Construction 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 Tengda Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Tengda Construction.
Diversification Opportunities for BYD Co and Tengda Construction
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BYD and Tengda is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Tengda Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tengda Construction 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 Tengda Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tengda Construction has no effect on the direction of BYD Co i.e., BYD Co and Tengda Construction go up and down completely randomly.
Pair Corralation between BYD Co and Tengda Construction
Assuming the 90 days trading horizon BYD Co is expected to generate 1.07 times less return on investment than Tengda Construction. In addition to that, BYD Co is 1.16 times more volatile than Tengda Construction Group. It trades about 0.05 of its total potential returns per unit of risk. Tengda Construction Group is currently generating about 0.06 per unit of volatility. If you would invest 224.00 in Tengda Construction Group on November 5, 2024 and sell it today you would earn a total of 3.00 from holding Tengda Construction Group or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYD Co Ltd vs. Tengda Construction Group
Performance |
| Timeline |
| BYD Co |
| Tengda Construction |
BYD Co and Tengda Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and Tengda Construction
The main advantage of trading using opposite BYD Co and Tengda Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Tengda Construction 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 Tengda Construction will offset losses from the drop in Tengda Construction'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 |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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