Correlation Between Deutsche Post and BYD Co
Can any of the company-specific risk be diversified away by investing in both Deutsche Post and BYD Co at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Deutsche Post and BYD Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Post AG and BYD Co, you can compare the effects of market volatilities on Deutsche Post 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 Deutsche Post with a short position of BYD Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Post and BYD Co.
Diversification Opportunities for Deutsche Post and BYD Co
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Deutsche and BYD is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Post AG and BYD Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYD Co and Deutsche Post 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 Deutsche Post AG 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 Deutsche Post i.e., Deutsche Post and BYD Co go up and down completely randomly.
Pair Corralation between Deutsche Post and BYD Co
Assuming the 90 days trading horizon Deutsche Post AG is expected to under-perform the BYD Co. But the stock apears to be less risky and, when comparing its historical volatility, Deutsche Post AG is 2.11 times less risky than BYD Co. The stock trades about -0.23 of its potential returns per unit of risk. The BYD Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,561 in BYD Co on August 30, 2024 and sell it today you would lose (1.00) from holding BYD Co or give up 0.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Post AG vs. BYD Co
Performance |
| Timeline |
| Deutsche Post AG |
| BYD Co |
Deutsche Post and BYD Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Post and BYD Co
The main advantage of trading using opposite Deutsche Post and BYD Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Post 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.| Deutsche Post vs. Lendinvest PLC | Deutsche Post vs. Neometals | Deutsche Post vs. Albion Technology General | Deutsche Post vs. Jupiter Fund Management |
| BYD Co vs. Lendinvest PLC | BYD Co vs. Neometals | BYD Co vs. Albion Technology General | BYD Co vs. Jupiter Fund Management |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |