Correlation Between BYD Co and CT Global
Can any of the company-specific risk be diversified away by investing in both BYD Co and CT Global 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 Co and CT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BYD Co and CT Global Managed, you can compare the effects of market volatilities on BYD Co and CT Global 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 Co with a short position of CT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and CT Global.
Diversification Opportunities for BYD Co and CT Global
Very good diversification
The 3 months correlation between BYD and CMPG is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co and CT Global Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CT Global Managed and BYD Co 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 CT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CT Global Managed has no effect on the direction of BYD Co i.e., BYD Co and CT Global go up and down completely randomly.
Pair Corralation between BYD Co and CT Global
Assuming the 90 days trading horizon BYD Co is expected to generate 46.24 times more return on investment than CT Global. However, BYD Co is 46.24 times more volatile than CT Global Managed. It trades about 0.05 of its potential returns per unit of risk. CT Global Managed is currently generating about 0.05 per unit of risk. If you would invest 3,505 in BYD Co on August 30, 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 | 99.8% |
| Values | Daily Returns |
BYD Co vs. CT Global Managed
Performance |
| Timeline |
| BYD Co |
| CT Global Managed |
BYD Co and CT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and CT Global
The main advantage of trading using opposite BYD Co and CT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, CT Global 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 CT Global will offset losses from the drop in CT Global's long position.| BYD Co vs. Lendinvest PLC | BYD Co vs. Neometals | BYD Co vs. Albion Technology General | BYD Co vs. Jupiter Fund Management |
| CT Global vs. McEwen Mining | CT Global vs. Lundin Mining Corp | CT Global vs. Cairn Homes PLC | CT Global vs. Hochschild Mining plc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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