Correlation Between BYD and Oceaneering International
Can any of the company-specific risk be diversified away by investing in both BYD and Oceaneering International 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 Oceaneering International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BYD Co and Oceaneering International, you can compare the effects of market volatilities on BYD and Oceaneering International 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 Oceaneering International. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD and Oceaneering International.
Diversification Opportunities for BYD and Oceaneering International
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between BYD and Oceaneering is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co and Oceaneering International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oceaneering International 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 Oceaneering International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oceaneering International has no effect on the direction of BYD i.e., BYD and Oceaneering International go up and down completely randomly.
Pair Corralation between BYD and Oceaneering International
Assuming the 90 days trading horizon BYD is expected to generate 2.31 times less return on investment than Oceaneering International. In addition to that, BYD is 2.8 times more volatile than Oceaneering International. It trades about 0.03 of its total potential returns per unit of risk. Oceaneering International is currently generating about 0.18 per unit of volatility. If you would invest 2,441 in Oceaneering International on October 20, 2024 and sell it today you would earn a total of 162.00 from holding Oceaneering International or generate 6.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
BYD Co vs. Oceaneering International
Performance |
| Timeline |
| BYD Co |
| Oceaneering International |
BYD and Oceaneering International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD and Oceaneering International
The main advantage of trading using opposite BYD and Oceaneering International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD position performs unexpectedly, Oceaneering International 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 Oceaneering International will offset losses from the drop in Oceaneering International's long position.| BYD vs. GlobalData PLC | BYD vs. Zoom Video Communications | BYD vs. Gamma Communications PLC | BYD vs. Extra Space Storage |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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