Correlation Between BYD Co and Eastroc Beverage
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By analyzing existing cross correlation between BYD Co Ltd and Eastroc Beverage Group, you can compare the effects of market volatilities on BYD Co and Eastroc Beverage 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 Eastroc Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Eastroc Beverage.
Diversification Opportunities for BYD Co and Eastroc Beverage
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BYD and Eastroc is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Eastroc Beverage Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastroc Beverage 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 Eastroc Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastroc Beverage has no effect on the direction of BYD Co i.e., BYD Co and Eastroc Beverage go up and down completely randomly.
Pair Corralation between BYD Co and Eastroc Beverage
Assuming the 90 days trading horizon BYD Co is expected to generate 3.54 times less return on investment than Eastroc Beverage. But when comparing it to its historical volatility, BYD Co Ltd is 1.45 times less risky than Eastroc Beverage. It trades about 0.14 of its potential returns per unit of risk. Eastroc Beverage Group is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 20,978 in Eastroc Beverage Group on September 29, 2024 and sell it today you would earn a total of 3,408 from holding Eastroc Beverage Group or generate 16.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYD Co Ltd vs. Eastroc Beverage Group
Performance |
| Timeline |
| BYD Co |
| Eastroc Beverage |
BYD Co and Eastroc Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and Eastroc Beverage
The main advantage of trading using opposite BYD Co and Eastroc Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Eastroc Beverage 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 Eastroc Beverage will offset losses from the drop in Eastroc Beverage's long position.The idea behind BYD Co Ltd and Eastroc Beverage Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Eastroc Beverage vs. BYD Co Ltd | Eastroc Beverage vs. China Mobile Limited | Eastroc Beverage vs. Agricultural Bank of | Eastroc Beverage vs. Industrial and Commercial |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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