Correlation Between BYD Co and Bank of Communications
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By analyzing existing cross correlation between BYD Co Ltd and Bank of Communications, you can compare the effects of market volatilities on BYD Co and Bank of Communications 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 Bank of Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Bank of Communications.
Diversification Opportunities for BYD Co and Bank of Communications
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BYD and Bank is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Bank of Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Communications 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 Bank of Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Communications has no effect on the direction of BYD Co i.e., BYD Co and Bank of Communications go up and down completely randomly.
Pair Corralation between BYD Co and Bank of Communications
Assuming the 90 days trading horizon BYD Co Ltd is expected to generate 1.47 times more return on investment than Bank of Communications. However, BYD Co is 1.47 times more volatile than Bank of Communications. It trades about 0.1 of its potential returns per unit of risk. Bank of Communications is currently generating about 0.06 per unit of risk. If you would invest 18,850 in BYD Co Ltd on September 1, 2024 and sell it today you would earn a total of 8,633 from holding BYD Co Ltd or generate 45.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYD Co Ltd vs. Bank of Communications
Performance |
| Timeline |
| BYD Co |
| Bank of Communications |
BYD Co and Bank of Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and Bank of Communications
The main advantage of trading using opposite BYD Co and Bank of Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Bank of Communications 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 Bank of Communications will offset losses from the drop in Bank of Communications' long position.| BYD Co vs. Xilinmen Furniture Co | BYD Co vs. Markor International Home | BYD Co vs. Peoples Insurance of | BYD Co vs. DO Home Collection |
| Bank of Communications vs. Nancal Energy Saving Tech | Bank of Communications vs. Postal Savings Bank | Bank of Communications vs. Bank of Suzhou | Bank of Communications vs. Unisplendour Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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