Correlation Between BYD Co and China Construction
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By analyzing existing cross correlation between BYD Co Ltd and China Construction Bank, you can compare the effects of market volatilities on BYD Co and China Construction 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 Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and China Construction.
Diversification Opportunities for BYD Co and China Construction
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BYD and China is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and China Construction Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Construction 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 China Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Construction Bank has no effect on the direction of BYD Co i.e., BYD Co and China Construction go up and down completely randomly.
Pair Corralation between BYD Co and China Construction
Assuming the 90 days trading horizon BYD Co Ltd is expected to generate 0.98 times more return on investment than China Construction. However, BYD Co Ltd is 1.02 times less risky than China Construction. It trades about 0.05 of its potential returns per unit of risk. China Construction Bank is currently generating about -0.01 per unit of risk. If you would invest 27,110 in BYD Co Ltd on November 2, 2024 and sell it today you would earn a total of 340.00 from holding BYD Co Ltd or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYD Co Ltd vs. China Construction Bank
Performance |
| Timeline |
| BYD Co |
| China Construction Bank |
BYD Co and China Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and China Construction
The main advantage of trading using opposite BYD Co and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, China Construction 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 Construction will offset losses from the drop in China Construction's long position.| BYD Co vs. Baoding Dongli Machinery | BYD Co vs. Dingli Communications Corp | BYD Co vs. Senci Electric Machinery | BYD Co vs. Nanjing Putian Telecommunications |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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