Correlation Between BYD Co and China Citic
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By analyzing existing cross correlation between BYD Co Ltd and China Citic Bank, you can compare the effects of market volatilities on BYD Co and China Citic 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 Citic. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and China Citic.
Diversification Opportunities for BYD Co and China Citic
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BYD and China is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and China Citic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Citic 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 Citic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Citic Bank has no effect on the direction of BYD Co i.e., BYD Co and China Citic go up and down completely randomly.
Pair Corralation between BYD Co and China Citic
Assuming the 90 days trading horizon BYD Co Ltd is expected to generate 1.18 times more return on investment than China Citic. However, BYD Co is 1.18 times more volatile than China Citic Bank. It trades about 0.07 of its potential returns per unit of risk. China Citic Bank is currently generating about 0.02 per unit of risk. If you would invest 24,380 in BYD Co Ltd on September 27, 2024 and sell it today you would earn a total of 4,212 from holding BYD Co Ltd or generate 17.28% 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. China Citic Bank
Performance |
| Timeline |
| BYD Co |
| China Citic Bank |
BYD Co and China Citic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and China Citic
The main advantage of trading using opposite BYD Co and China Citic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, China Citic 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 Citic will offset losses from the drop in China Citic'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 |
| China Citic vs. Kweichow Moutai Co | China Citic vs. Contemporary Amperex Technology | China Citic vs. G bits Network Technology | China Citic 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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