Correlation Between BYD ELECTRONIC and ENGIE ADR/1
Can any of the company-specific risk be diversified away by investing in both BYD ELECTRONIC and ENGIE ADR/1 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 ELECTRONIC and ENGIE ADR/1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BYD ELECTRONIC and ENGIE ADR1 EO, you can compare the effects of market volatilities on BYD ELECTRONIC and ENGIE ADR/1 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 ELECTRONIC with a short position of ENGIE ADR/1. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD ELECTRONIC and ENGIE ADR/1.
Diversification Opportunities for BYD ELECTRONIC and ENGIE ADR/1
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BYD and ENGIE is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding BYD ELECTRONIC and ENGIE ADR1 EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENGIE ADR1 EO and BYD ELECTRONIC 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 ELECTRONIC are associated (or correlated) with ENGIE ADR/1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENGIE ADR1 EO has no effect on the direction of BYD ELECTRONIC i.e., BYD ELECTRONIC and ENGIE ADR/1 go up and down completely randomly.
Pair Corralation between BYD ELECTRONIC and ENGIE ADR/1
Assuming the 90 days trading horizon BYD ELECTRONIC is expected to generate 7.16 times more return on investment than ENGIE ADR/1. However, BYD ELECTRONIC is 7.16 times more volatile than ENGIE ADR1 EO. It trades about 0.13 of its potential returns per unit of risk. ENGIE ADR1 EO is currently generating about -0.21 per unit of risk. If you would invest 370.00 in BYD ELECTRONIC on September 1, 2024 and sell it today you would earn a total of 44.00 from holding BYD ELECTRONIC or generate 11.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
BYD ELECTRONIC vs. ENGIE ADR1 EO
Performance |
| Timeline |
| BYD ELECTRONIC |
| ENGIE ADR1 EO |
BYD ELECTRONIC and ENGIE ADR/1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD ELECTRONIC and ENGIE ADR/1
The main advantage of trading using opposite BYD ELECTRONIC and ENGIE ADR/1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD ELECTRONIC position performs unexpectedly, ENGIE ADR/1 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 ENGIE ADR/1 will offset losses from the drop in ENGIE ADR/1's long position.| BYD ELECTRONIC vs. Texas Roadhouse | BYD ELECTRONIC vs. FUYO GENERAL LEASE | BYD ELECTRONIC vs. KAUFMAN ET BROAD | BYD ELECTRONIC vs. QUEEN S ROAD |
| ENGIE ADR/1 vs. BYD ELECTRONIC | ENGIE ADR/1 vs. AOI Electronics Co | ENGIE ADR/1 vs. INTERSHOP Communications Aktiengesellschaft | ENGIE ADR/1 vs. Taiwan Semiconductor Manufacturing |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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