Correlation Between BYD Co and Cultural Investment
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By analyzing existing cross correlation between BYD Co Ltd and Cultural Investment Holdings, you can compare the effects of market volatilities on BYD Co and Cultural Investment 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 Cultural Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Cultural Investment.
Diversification Opportunities for BYD Co and Cultural Investment
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BYD and Cultural is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Cultural Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cultural Investment 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 Cultural Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cultural Investment has no effect on the direction of BYD Co i.e., BYD Co and Cultural Investment go up and down completely randomly.
Pair Corralation between BYD Co and Cultural Investment
Assuming the 90 days trading horizon BYD Co Ltd is expected to under-perform the Cultural Investment. But the stock apears to be less risky and, when comparing its historical volatility, BYD Co Ltd is 1.76 times less risky than Cultural Investment. The stock trades about -0.18 of its potential returns per unit of risk. The Cultural Investment Holdings is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 196.00 in Cultural Investment Holdings on August 24, 2024 and sell it today you would earn a total of 47.00 from holding Cultural Investment Holdings or generate 23.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYD Co Ltd vs. Cultural Investment Holdings
Performance |
| Timeline |
| BYD Co |
| Cultural Investment |
BYD Co and Cultural Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and Cultural Investment
The main advantage of trading using opposite BYD Co and Cultural Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Cultural Investment 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 Cultural Investment will offset losses from the drop in Cultural Investment's long position.| BYD Co vs. Southchip Semiconductor Technology | BYD Co vs. Semiconductor Manufacturing Electronics | BYD Co vs. Jilin Chemical Fibre | BYD Co vs. Juewei Food Co |
| Cultural Investment vs. Jinhe Biotechnology Co | Cultural Investment vs. Guangzhou KingTeller Technology | Cultural Investment vs. Glodon Software Co | Cultural Investment vs. Northking 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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