Correlation Between BYD and Fidelity National
Can any of the company-specific risk be diversified away by investing in both BYD and Fidelity National 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 BYD and Fidelity National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BYD Co and Fidelity National Information, you can compare the effects of market volatilities on BYD and Fidelity National 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 with a short position of Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD and Fidelity National.
Diversification Opportunities for BYD and Fidelity National
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between BYD and Fidelity is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National and BYD 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 are associated (or correlated) with Fidelity National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity National has no effect on the direction of BYD i.e., BYD and Fidelity National go up and down completely randomly.
Pair Corralation between BYD and Fidelity National
Assuming the 90 days trading horizon BYD Co is expected to generate 7.76 times more return on investment than Fidelity National. However, BYD is 7.76 times more volatile than Fidelity National Information. It trades about 0.03 of its potential returns per unit of risk. Fidelity National Information is currently generating about -0.3 per unit of risk. If you would invest 3,560 in BYD Co on October 25, 2024 and sell it today you would earn a total of 0.00 from holding BYD Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
BYD Co vs. Fidelity National Information
Performance |
| Timeline |
| BYD Co |
| Fidelity National |
BYD and Fidelity National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD and Fidelity National
The main advantage of trading using opposite BYD and Fidelity National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD position performs unexpectedly, Fidelity National 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 Fidelity National will offset losses from the drop in Fidelity National's long position.| BYD vs. LBG Media PLC | BYD vs. Synthomer plc | BYD vs. G5 Entertainment AB | BYD vs. Ecclesiastical Insurance Office |
| Fidelity National vs. Toyota Motor Corp | Fidelity National vs. SoftBank Group Corp | Fidelity National vs. OTP Bank Nyrt | Fidelity National vs. ONEOK Inc |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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