Correlation Between BYD Co and Liaoning Port
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By analyzing existing cross correlation between BYD Co Ltd and Liaoning Port Co, you can compare the effects of market volatilities on BYD Co and Liaoning Port 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 Liaoning Port. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Liaoning Port.
Diversification Opportunities for BYD Co and Liaoning Port
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BYD and Liaoning is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Liaoning Port Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Port 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 Liaoning Port. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Port has no effect on the direction of BYD Co i.e., BYD Co and Liaoning Port go up and down completely randomly.
Pair Corralation between BYD Co and Liaoning Port
Assuming the 90 days trading horizon BYD Co Ltd is expected to generate 1.55 times more return on investment than Liaoning Port. However, BYD Co is 1.55 times more volatile than Liaoning Port Co. It trades about 0.02 of its potential returns per unit of risk. Liaoning Port Co is currently generating about 0.0 per unit of risk. If you would invest 26,319 in BYD Co Ltd on August 27, 2024 and sell it today you would earn a total of 1,530 from holding BYD Co Ltd or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYD Co Ltd vs. Liaoning Port Co
Performance |
| Timeline |
| BYD Co |
| Liaoning Port |
BYD Co and Liaoning Port Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and Liaoning Port
The main advantage of trading using opposite BYD Co and Liaoning Port positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Liaoning Port 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 Liaoning Port will offset losses from the drop in Liaoning Port'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 |
| Liaoning Port vs. Industrial and Commercial | Liaoning Port vs. Agricultural Bank of | Liaoning Port vs. China Construction Bank | Liaoning Port vs. Bank of China |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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