Correlation Between BYD Co and Fuzhou Rockchip
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By analyzing existing cross correlation between BYD Co Ltd and Fuzhou Rockchip Electronics, you can compare the effects of market volatilities on BYD Co and Fuzhou Rockchip 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 Fuzhou Rockchip. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Fuzhou Rockchip.
Diversification Opportunities for BYD Co and Fuzhou Rockchip
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BYD and Fuzhou is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Fuzhou Rockchip Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuzhou Rockchip 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 Fuzhou Rockchip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuzhou Rockchip Elec has no effect on the direction of BYD Co i.e., BYD Co and Fuzhou Rockchip go up and down completely randomly.
Pair Corralation between BYD Co and Fuzhou Rockchip
Assuming the 90 days trading horizon BYD Co is expected to generate 33.77 times less return on investment than Fuzhou Rockchip. But when comparing it to its historical volatility, BYD Co Ltd is 3.53 times less risky than Fuzhou Rockchip. It trades about 0.06 of its potential returns per unit of risk. Fuzhou Rockchip Electronics is currently generating about 0.55 of returns per unit of risk over similar time horizon. If you would invest 9,949 in Fuzhou Rockchip Electronics on November 4, 2024 and sell it today you would earn a total of 6,501 from holding Fuzhou Rockchip Electronics or generate 65.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYD Co Ltd vs. Fuzhou Rockchip Electronics
Performance |
| Timeline |
| BYD Co |
| Fuzhou Rockchip Elec |
BYD Co and Fuzhou Rockchip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and Fuzhou Rockchip
The main advantage of trading using opposite BYD Co and Fuzhou Rockchip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Fuzhou Rockchip 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 Fuzhou Rockchip will offset losses from the drop in Fuzhou Rockchip'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 |
| Fuzhou Rockchip vs. China World Trade | Fuzhou Rockchip vs. Heilongjiang Publishing Media | Fuzhou Rockchip vs. Offcn Education Technology | Fuzhou Rockchip vs. Bangyan Technology Co |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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