Correlation Between BYD Co and Industrial Bank
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By analyzing existing cross correlation between BYD Co Ltd and Industrial Bank Co, you can compare the effects of market volatilities on BYD Co and Industrial Bank 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 Industrial Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Industrial Bank.
Diversification Opportunities for BYD Co and Industrial Bank
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BYD and Industrial is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Industrial Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Bank 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 Industrial Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Bank has no effect on the direction of BYD Co i.e., BYD Co and Industrial Bank go up and down completely randomly.
Pair Corralation between BYD Co and Industrial Bank
Assuming the 90 days trading horizon BYD Co Ltd is expected to generate 1.46 times more return on investment than Industrial Bank. However, BYD Co is 1.46 times more volatile than Industrial Bank Co. It trades about 0.02 of its potential returns per unit of risk. Industrial Bank Co is currently generating about 0.03 per unit of risk. If you would invest 26,072 in BYD Co Ltd on September 26, 2024 and sell it today you would earn a total of 2,520 from holding BYD Co Ltd or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYD Co Ltd vs. Industrial Bank Co
Performance |
| Timeline |
| BYD Co |
| Industrial Bank |
BYD Co and Industrial Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and Industrial Bank
The main advantage of trading using opposite BYD Co and Industrial Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Industrial Bank 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 Industrial Bank will offset losses from the drop in Industrial Bank's long position.| BYD Co vs. Vanfund Urban Investment | BYD Co vs. Zhongrun Resources Investment | BYD Co vs. Tongyu Communication | BYD Co vs. Hubei Geoway Investment |
| Industrial Bank vs. Kweichow Moutai Co | Industrial Bank vs. Contemporary Amperex Technology | Industrial Bank vs. G bits Network Technology | Industrial Bank 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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