Correlation Between BYD Co and Nantong Haixing
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By analyzing existing cross correlation between BYD Co Ltd and Nantong Haixing Electronics, you can compare the effects of market volatilities on BYD Co and Nantong Haixing 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 Nantong Haixing. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Nantong Haixing.
Diversification Opportunities for BYD Co and Nantong Haixing
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BYD and Nantong is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Nantong Haixing Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nantong Haixing Elec 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 Nantong Haixing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nantong Haixing Elec has no effect on the direction of BYD Co i.e., BYD Co and Nantong Haixing go up and down completely randomly.
Pair Corralation between BYD Co and Nantong Haixing
Assuming the 90 days trading horizon BYD Co is expected to generate 6.35 times less return on investment than Nantong Haixing. In addition to that, BYD Co is 1.01 times more volatile than Nantong Haixing Electronics. It trades about 0.06 of its total potential returns per unit of risk. Nantong Haixing Electronics is currently generating about 0.37 per unit of volatility. If you would invest 1,229 in Nantong Haixing Electronics on November 4, 2024 and sell it today you would earn a total of 127.00 from holding Nantong Haixing Electronics or generate 10.33% 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. Nantong Haixing Electronics
Performance |
| Timeline |
| BYD Co |
| Nantong Haixing Elec |
BYD Co and Nantong Haixing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and Nantong Haixing
The main advantage of trading using opposite BYD Co and Nantong Haixing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Nantong Haixing 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 Nantong Haixing will offset losses from the drop in Nantong Haixing's long position.| BYD Co vs. Maccura Biotechnology Co | BYD Co vs. Jiangsu GDK Biotechnology | BYD Co vs. Chongqing Brewery Co | BYD Co vs. Shenzhen Bioeasy Biotechnology |
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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.
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