Correlation Between BYD and Hilton Food
Can any of the company-specific risk be diversified away by investing in both BYD and Hilton Food 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 Hilton Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BYD Co and Hilton Food Group, you can compare the effects of market volatilities on BYD and Hilton Food 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 Hilton Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD and Hilton Food.
Diversification Opportunities for BYD and Hilton Food
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between BYD and Hilton is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co and Hilton Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hilton Food Group 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 Hilton Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hilton Food Group has no effect on the direction of BYD i.e., BYD and Hilton Food go up and down completely randomly.
Pair Corralation between BYD and Hilton Food
Assuming the 90 days trading horizon BYD Co is expected to generate 2.96 times more return on investment than Hilton Food. However, BYD is 2.96 times more volatile than Hilton Food Group. It trades about 0.02 of its potential returns per unit of risk. Hilton Food Group is currently generating about -0.01 per unit of risk. If you would invest 3,558 in BYD Co on August 27, 2024 and sell it today you would earn a total of 2.00 from holding BYD Co or generate 0.06% 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. Hilton Food Group
Performance |
| Timeline |
| BYD Co |
| Hilton Food Group |
BYD and Hilton Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD and Hilton Food
The main advantage of trading using opposite BYD and Hilton Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD position performs unexpectedly, Hilton Food 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 Hilton Food will offset losses from the drop in Hilton Food's long position.| BYD vs. Samsung Electronics Co | BYD vs. Samsung Electronics Co | BYD vs. Hyundai Motor | BYD vs. Toyota Motor Corp |
| Hilton Food vs. Walmart | Hilton Food vs. BYD Co | Hilton Food vs. Volkswagen AG Non Vtg | Hilton Food vs. Deutsche Post AG |
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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