Correlation Between BYD and Atresmedia
Can any of the company-specific risk be diversified away by investing in both BYD and Atresmedia 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 Atresmedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BYD Co and Atresmedia, you can compare the effects of market volatilities on BYD and Atresmedia 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 Atresmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD and Atresmedia.
Diversification Opportunities for BYD and Atresmedia
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between BYD and Atresmedia is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co and Atresmedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atresmedia 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 Atresmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atresmedia has no effect on the direction of BYD i.e., BYD and Atresmedia go up and down completely randomly.
Pair Corralation between BYD and Atresmedia
Assuming the 90 days trading horizon BYD Co is expected to generate 13.79 times more return on investment than Atresmedia. However, BYD is 13.79 times more volatile than Atresmedia. It trades about 0.05 of its potential returns per unit of risk. Atresmedia is currently generating about 0.08 per unit of risk. If you would invest 3,505 in BYD Co on October 12, 2024 and sell it today you would earn a total of 55.00 from holding BYD Co or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYD Co vs. Atresmedia
Performance |
| Timeline |
| BYD Co |
| Atresmedia |
BYD and Atresmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD and Atresmedia
The main advantage of trading using opposite BYD and Atresmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD position performs unexpectedly, Atresmedia 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 Atresmedia will offset losses from the drop in Atresmedia's long position.The idea behind BYD Co and Atresmedia 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.| Atresmedia vs. Walmart | Atresmedia vs. BYD Co | Atresmedia vs. Volkswagen AG | Atresmedia vs. Volkswagen AG Non Vtg |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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