Correlation Between BYD Co and China Aluminum
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By analyzing existing cross correlation between BYD Co Ltd and China Aluminum International, you can compare the effects of market volatilities on BYD Co and China Aluminum 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 China Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and China Aluminum.
Diversification Opportunities for BYD Co and China Aluminum
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BYD and China is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and China Aluminum International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aluminum Inter 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 China Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aluminum Inter has no effect on the direction of BYD Co i.e., BYD Co and China Aluminum go up and down completely randomly.
Pair Corralation between BYD Co and China Aluminum
Assuming the 90 days trading horizon BYD Co Ltd is expected to generate 0.99 times more return on investment than China Aluminum. However, BYD Co Ltd is 1.01 times less risky than China Aluminum. It trades about -0.05 of its potential returns per unit of risk. China Aluminum International is currently generating about -0.24 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 (592.00) from holding BYD Co Ltd or give up 2.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYD Co Ltd vs. China Aluminum International
Performance |
| Timeline |
| BYD Co |
| China Aluminum Inter |
BYD Co and China Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and China Aluminum
The main advantage of trading using opposite BYD Co and China Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, China Aluminum 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 China Aluminum will offset losses from the drop in China Aluminum'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 |
| China Aluminum vs. Kweichow Moutai Co | China Aluminum vs. Contemporary Amperex Technology | China Aluminum vs. Beijing Roborock Technology | China Aluminum 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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