Correlation Between BYD and JLEN Environmental
Can any of the company-specific risk be diversified away by investing in both BYD and JLEN Environmental 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 JLEN Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BYD Co and JLEN Environmental Assets, you can compare the effects of market volatilities on BYD and JLEN Environmental 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 JLEN Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD and JLEN Environmental.
Diversification Opportunities for BYD and JLEN Environmental
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BYD and JLEN is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co and JLEN Environmental Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JLEN Environmental Assets 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 JLEN Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JLEN Environmental Assets has no effect on the direction of BYD i.e., BYD and JLEN Environmental go up and down completely randomly.
Pair Corralation between BYD and JLEN Environmental
Assuming the 90 days trading horizon BYD Co is expected to generate 2.84 times more return on investment than JLEN Environmental. However, BYD is 2.84 times more volatile than JLEN Environmental Assets. It trades about 0.02 of its potential returns per unit of risk. JLEN Environmental Assets is currently generating about -0.19 per unit of risk. If you would invest 3,560 in BYD Co on October 12, 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 Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
BYD Co vs. JLEN Environmental Assets
Performance |
| Timeline |
| BYD Co |
| JLEN Environmental Assets |
BYD and JLEN Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD and JLEN Environmental
The main advantage of trading using opposite BYD and JLEN Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD position performs unexpectedly, JLEN Environmental 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 JLEN Environmental will offset losses from the drop in JLEN Environmental's long position.The idea behind BYD Co and JLEN Environmental Assets pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| JLEN Environmental vs. BYD Co | JLEN Environmental vs. Volkswagen AG Non Vtg | JLEN Environmental vs. United Parcel Service | JLEN Environmental vs. Jardine Matheson Holdings |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |