Correlation Between Huaneng Lancang and BYD Co
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By analyzing existing cross correlation between Huaneng Lancang River and BYD Co Ltd, you can compare the effects of market volatilities on Huaneng Lancang and BYD Co 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 Huaneng Lancang with a short position of BYD Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huaneng Lancang and BYD Co.
Diversification Opportunities for Huaneng Lancang and BYD Co
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Huaneng and BYD is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Huaneng Lancang River and BYD Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYD Co and Huaneng Lancang 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 Huaneng Lancang River are associated (or correlated) with BYD Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BYD Co has no effect on the direction of Huaneng Lancang i.e., Huaneng Lancang and BYD Co go up and down completely randomly.
Pair Corralation between Huaneng Lancang and BYD Co
Assuming the 90 days trading horizon Huaneng Lancang River is expected to generate 0.7 times more return on investment than BYD Co. However, Huaneng Lancang River is 1.42 times less risky than BYD Co. It trades about -0.16 of its potential returns per unit of risk. BYD Co Ltd is currently generating about -0.16 per unit of risk. If you would invest 973.00 in Huaneng Lancang River on September 1, 2024 and sell it today you would lose (43.00) from holding Huaneng Lancang River or give up 4.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huaneng Lancang River vs. BYD Co Ltd
Performance |
| Timeline |
| Huaneng Lancang River |
| BYD Co |
Huaneng Lancang and BYD Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huaneng Lancang and BYD Co
The main advantage of trading using opposite Huaneng Lancang and BYD Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huaneng Lancang position performs unexpectedly, BYD Co 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 BYD Co will offset losses from the drop in BYD Co's long position.| Huaneng Lancang vs. Ligao Foods CoLtd | Huaneng Lancang vs. China Publishing Media | Huaneng Lancang vs. Dook Media Group | Huaneng Lancang vs. Anji Foodstuff Co |
| BYD Co vs. Xilinmen Furniture Co | BYD Co vs. Markor International Home | BYD Co vs. Peoples Insurance of | BYD Co vs. DO Home Collection |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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