Correlation Between Guangzhou Jointas and BYD Co
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By analyzing existing cross correlation between Guangzhou Jointas Chemical and BYD Co Ltd, you can compare the effects of market volatilities on Guangzhou Jointas and BYD Co 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 Guangzhou Jointas with a short position of BYD Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Jointas and BYD Co.
Diversification Opportunities for Guangzhou Jointas and BYD Co
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Guangzhou and BYD is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Jointas Chemical and BYD Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYD Co and Guangzhou Jointas 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 Guangzhou Jointas Chemical are associated (or correlated) with BYD Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BYD Co has no effect on the direction of Guangzhou Jointas i.e., Guangzhou Jointas and BYD Co go up and down completely randomly.
Pair Corralation between Guangzhou Jointas and BYD Co
Assuming the 90 days trading horizon Guangzhou Jointas is expected to generate 9.42 times less return on investment than BYD Co. But when comparing it to its historical volatility, Guangzhou Jointas Chemical is 2.78 times less risky than BYD Co. It trades about 0.19 of its potential returns per unit of risk. BYD Co Ltd is currently generating about 0.66 of returns per unit of risk over similar time horizon. If you would invest 27,450 in BYD Co Ltd on November 27, 2024 and sell it today you would earn a total of 10,178 from holding BYD Co Ltd or generate 37.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Jointas Chemical vs. BYD Co Ltd
Performance |
| Timeline |
| Guangzhou Jointas |
| BYD Co |
Guangzhou Jointas and BYD Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Jointas and BYD Co
The main advantage of trading using opposite Guangzhou Jointas and BYD Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Jointas position performs unexpectedly, BYD Co 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 BYD Co will offset losses from the drop in BYD Co's long position.| Guangzhou Jointas vs. Zhengping RoadBridge Constr | Guangzhou Jointas vs. Silkroad Visual Technology | Guangzhou Jointas vs. Huawen Media Investment | Guangzhou Jointas vs. Sichuan Fulin Transportation |
| BYD Co vs. Henan Shuanghui Investment | BYD Co vs. Tianshan Aluminum Group | BYD Co vs. Harson Trading China | BYD Co vs. Zhongrun Resources Investment |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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