Correlation Between BYD and Bertrandt
Can any of the company-specific risk be diversified away by investing in both BYD and Bertrandt 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 Bertrandt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BYD Co and Bertrandt AG, you can compare the effects of market volatilities on BYD and Bertrandt 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 Bertrandt. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD and Bertrandt.
Diversification Opportunities for BYD and Bertrandt
Average diversification
The 3 months correlation between BYD and Bertrandt is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co and Bertrandt AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bertrandt AG 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 Bertrandt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bertrandt AG has no effect on the direction of BYD i.e., BYD and Bertrandt go up and down completely randomly.
Pair Corralation between BYD and Bertrandt
Assuming the 90 days trading horizon BYD is expected to generate 2.43 times less return on investment than Bertrandt. In addition to that, BYD is 2.29 times more volatile than Bertrandt AG. It trades about 0.03 of its total potential returns per unit of risk. Bertrandt AG is currently generating about 0.14 per unit of volatility. If you would invest 1,800 in Bertrandt AG on October 25, 2024 and sell it today you would earn a total of 118.00 from holding Bertrandt AG or generate 6.56% 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. Bertrandt AG
Performance |
| Timeline |
| BYD Co |
| Bertrandt AG |
BYD and Bertrandt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD and Bertrandt
The main advantage of trading using opposite BYD and Bertrandt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD position performs unexpectedly, Bertrandt 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 Bertrandt will offset losses from the drop in Bertrandt's long position.| BYD vs. LBG Media PLC | BYD vs. Synthomer plc | BYD vs. G5 Entertainment AB | BYD vs. Ecclesiastical Insurance Office |
| Bertrandt vs. Martin Marietta Materials | Bertrandt vs. JD Sports Fashion | Bertrandt vs. JB Hunt Transport | Bertrandt vs. Summit Materials Cl |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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