Correlation Between BYD Co and China State
Specify exactly 2 symbols:
By analyzing existing cross correlation between BYD Co Ltd and China State Construction, you can compare the effects of market volatilities on BYD Co and China State 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 State. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and China State.
Diversification Opportunities for BYD Co and China State
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BYD and China is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and China State Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China State 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 China State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China State Construction has no effect on the direction of BYD Co i.e., BYD Co and China State go up and down completely randomly.
Pair Corralation between BYD Co and China State
Assuming the 90 days trading horizon BYD Co Ltd is expected to under-perform the China State. But the stock apears to be less risky and, when comparing its historical volatility, BYD Co Ltd is 1.09 times less risky than China State. The stock trades about -0.18 of its potential returns per unit of risk. The China State Construction is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 614.00 in China State Construction on August 27, 2024 and sell it today you would lose (25.00) from holding China State Construction or give up 4.07% 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 State Construction
Performance |
| Timeline |
| BYD Co |
| China State Construction |
BYD Co and China State Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and China State
The main advantage of trading using opposite BYD Co and China State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, China State 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 State will offset losses from the drop in China State's long position.| BYD Co vs. Changchun Faway Automobile | BYD Co vs. Songz Automobile Air | BYD Co vs. Tongyu Communication | BYD Co vs. Hubei Yingtong Telecommunication |
| China State vs. Ming Yang Smart | China State vs. 159681 | China State vs. 159005 | China State vs. Loctek Ergonomic 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |