Correlation Between Pengxin International and BYD Co
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By analyzing existing cross correlation between Pengxin International Mining and BYD Co Ltd, you can compare the effects of market volatilities on Pengxin International 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 Pengxin International with a short position of BYD Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pengxin International and BYD Co.
Diversification Opportunities for Pengxin International and BYD Co
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pengxin and BYD is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Pengxin International Mining and BYD Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYD Co and Pengxin International 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 Pengxin International Mining 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 Pengxin International i.e., Pengxin International and BYD Co go up and down completely randomly.
Pair Corralation between Pengxin International and BYD Co
Assuming the 90 days trading horizon Pengxin International Mining is expected to generate 1.45 times more return on investment than BYD Co. However, Pengxin International is 1.45 times more volatile than BYD Co Ltd. It trades about 0.01 of its potential returns per unit of risk. BYD Co Ltd is currently generating about 0.01 per unit of risk. If you would invest 325.00 in Pengxin International Mining on August 29, 2024 and sell it today you would lose (10.00) from holding Pengxin International Mining or give up 3.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pengxin International Mining vs. BYD Co Ltd
Performance |
| Timeline |
| Pengxin International |
| BYD Co |
Pengxin International and BYD Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pengxin International and BYD Co
The main advantage of trading using opposite Pengxin International and BYD Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pengxin International 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.| Pengxin International vs. Shandong Gold Mining | Pengxin International vs. Rongsheng Petrochemical Co | Pengxin International vs. Inner Mongolia BaoTou | Pengxin International vs. Jiangxi Ganfeng Lithium |
| BYD Co vs. Guangzhou Jointas Chemical | BYD Co vs. Glodon Software Co | BYD Co vs. Longxing Chemical Stock | BYD Co vs. Xilong Chemical Co |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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