Correlation Between BYD Co and Shanghai Yanpu
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By analyzing existing cross correlation between BYD Co Ltd and Shanghai Yanpu Metal, you can compare the effects of market volatilities on BYD Co and Shanghai Yanpu 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 Shanghai Yanpu. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Shanghai Yanpu.
Diversification Opportunities for BYD Co and Shanghai Yanpu
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BYD and Shanghai is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Shanghai Yanpu Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Yanpu Metal 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 Shanghai Yanpu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Yanpu Metal has no effect on the direction of BYD Co i.e., BYD Co and Shanghai Yanpu go up and down completely randomly.
Pair Corralation between BYD Co and Shanghai Yanpu
Assuming the 90 days trading horizon BYD Co is expected to generate 1.06 times less return on investment than Shanghai Yanpu. But when comparing it to its historical volatility, BYD Co Ltd is 1.3 times less risky than Shanghai Yanpu. It trades about 0.09 of its potential returns per unit of risk. Shanghai Yanpu Metal is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,100 in Shanghai Yanpu Metal on September 3, 2024 and sell it today you would earn a total of 938.00 from holding Shanghai Yanpu Metal or generate 30.26% 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. Shanghai Yanpu Metal
Performance |
| Timeline |
| BYD Co |
| Shanghai Yanpu Metal |
BYD Co and Shanghai Yanpu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and Shanghai Yanpu
The main advantage of trading using opposite BYD Co and Shanghai Yanpu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Shanghai Yanpu 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 Shanghai Yanpu will offset losses from the drop in Shanghai Yanpu's long position.| BYD Co vs. Bus Online Co | BYD Co vs. Zhangjiagang Freetrade Science | BYD Co vs. Vontron Technology Co | BYD Co vs. Tianshui Huatian Technology |
| Shanghai Yanpu vs. PetroChina Co Ltd | Shanghai Yanpu vs. China Mobile Limited | Shanghai Yanpu vs. Industrial and Commercial | Shanghai Yanpu vs. China Life Insurance |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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