Correlation Between BYD and G5 Entertainment
Can any of the company-specific risk be diversified away by investing in both BYD and G5 Entertainment 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 G5 Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BYD Co and G5 Entertainment AB, you can compare the effects of market volatilities on BYD and G5 Entertainment 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 G5 Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD and G5 Entertainment.
Diversification Opportunities for BYD and G5 Entertainment
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between BYD and 0QUS is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co and G5 Entertainment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G5 Entertainment 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 G5 Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G5 Entertainment has no effect on the direction of BYD i.e., BYD and G5 Entertainment go up and down completely randomly.
Pair Corralation between BYD and G5 Entertainment
Assuming the 90 days trading horizon BYD is expected to generate 4.37 times less return on investment than G5 Entertainment. In addition to that, BYD is 2.41 times more volatile than G5 Entertainment AB. It trades about 0.03 of its total potential returns per unit of risk. G5 Entertainment AB is currently generating about 0.27 per unit of volatility. If you would invest 10,700 in G5 Entertainment AB on October 25, 2024 and sell it today you would earn a total of 1,280 from holding G5 Entertainment AB or generate 11.96% 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. G5 Entertainment AB
Performance |
| Timeline |
| BYD Co |
| G5 Entertainment |
BYD and G5 Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD and G5 Entertainment
The main advantage of trading using opposite BYD and G5 Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD position performs unexpectedly, G5 Entertainment 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 G5 Entertainment will offset losses from the drop in G5 Entertainment's long position.| BYD vs. LBG Media PLC | BYD vs. Synthomer plc | BYD vs. G5 Entertainment AB | BYD vs. Ecclesiastical Insurance Office |
| G5 Entertainment vs. Spirent Communications plc | G5 Entertainment vs. Infrastrutture Wireless Italiane | G5 Entertainment vs. Public Storage | G5 Entertainment vs. Datalogic |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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