Correlation Between BYD and Datagroup
Can any of the company-specific risk be diversified away by investing in both BYD and Datagroup 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 Datagroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BYD Co and Datagroup SE, you can compare the effects of market volatilities on BYD and Datagroup 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 Datagroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD and Datagroup.
Diversification Opportunities for BYD and Datagroup
Good diversification
The 3 months correlation between BYD and Datagroup is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co and Datagroup SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datagroup SE 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 Datagroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datagroup SE has no effect on the direction of BYD i.e., BYD and Datagroup go up and down completely randomly.
Pair Corralation between BYD and Datagroup
Assuming the 90 days trading horizon BYD Co is expected to generate 3.23 times more return on investment than Datagroup. However, BYD is 3.23 times more volatile than Datagroup SE. It trades about 0.08 of its potential returns per unit of risk. Datagroup SE is currently generating about -0.03 per unit of risk. If you would invest 3,165 in BYD Co on October 26, 2024 and sell it today you would earn a total of 395.00 from holding BYD Co or generate 12.48% 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. Datagroup SE
Performance |
| Timeline |
| BYD Co |
| Datagroup SE |
BYD and Datagroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD and Datagroup
The main advantage of trading using opposite BYD and Datagroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD position performs unexpectedly, Datagroup 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 Datagroup will offset losses from the drop in Datagroup's long position.| BYD vs. HCA Healthcare | BYD vs. Cairo Communication SpA | BYD vs. Advanced Medical Solutions | BYD vs. Induction Healthcare Group |
| Datagroup vs. Supermarket Income REIT | Datagroup vs. Alliance Data Systems | Datagroup vs. Silver Bullet Data | Datagroup vs. Monster Beverage Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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