Correlation Between BYD Co and Hangzhou Huawang
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By analyzing existing cross correlation between BYD Co Ltd and Hangzhou Huawang New, you can compare the effects of market volatilities on BYD Co and Hangzhou Huawang 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 Hangzhou Huawang. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Hangzhou Huawang.
Diversification Opportunities for BYD Co and Hangzhou Huawang
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BYD and Hangzhou is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Hangzhou Huawang New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Huawang New 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 Hangzhou Huawang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Huawang New has no effect on the direction of BYD Co i.e., BYD Co and Hangzhou Huawang go up and down completely randomly.
Pair Corralation between BYD Co and Hangzhou Huawang
Assuming the 90 days trading horizon BYD Co Ltd is expected to under-perform the Hangzhou Huawang. But the stock apears to be less risky and, when comparing its historical volatility, BYD Co Ltd is 1.02 times less risky than Hangzhou Huawang. The stock trades about -0.16 of its potential returns per unit of risk. The Hangzhou Huawang New is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,222 in Hangzhou Huawang New on September 1, 2024 and sell it today you would earn a total of 42.00 from holding Hangzhou Huawang New or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYD Co Ltd vs. Hangzhou Huawang New
Performance |
| Timeline |
| BYD Co |
| Hangzhou Huawang New |
BYD Co and Hangzhou Huawang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and Hangzhou Huawang
The main advantage of trading using opposite BYD Co and Hangzhou Huawang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Hangzhou Huawang 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 Hangzhou Huawang will offset losses from the drop in Hangzhou Huawang's long position.| BYD Co vs. Xilinmen Furniture Co | BYD Co vs. Markor International Home | BYD Co vs. Peoples Insurance of | BYD Co vs. DO Home Collection |
| Hangzhou Huawang vs. Zijin Mining Group | Hangzhou Huawang vs. Wanhua Chemical Group | Hangzhou Huawang vs. Baoshan Iron Steel | Hangzhou Huawang vs. Shandong Gold Mining |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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