Correlation Between BYD and Walmart
Can any of the company-specific risk be diversified away by investing in both BYD and Walmart 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 Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BYD Co and Walmart, you can compare the effects of market volatilities on BYD and Walmart 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 Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD and Walmart.
Diversification Opportunities for BYD and Walmart
Good diversification
The 3 months correlation between BYD and Walmart is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart 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 Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of BYD i.e., BYD and Walmart go up and down completely randomly.
Pair Corralation between BYD and Walmart
If you would invest 3,560 in BYD Co on November 2, 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 Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
BYD Co vs. Walmart
Performance |
| Timeline |
| BYD Co |
| Walmart |
BYD and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD and Walmart
The main advantage of trading using opposite BYD and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD position performs unexpectedly, Walmart 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 Walmart will offset losses from the drop in Walmart's long position.| BYD vs. Empire Metals Limited | BYD vs. Infrastrutture Wireless Italiane | BYD vs. Geely Automobile Holdings | BYD vs. Power Metal Resources |
| Walmart vs. Dalata Hotel Group | Walmart vs. Inspiration Healthcare Group | Walmart vs. Omega Healthcare Investors | Walmart vs. Planet Fitness 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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