Correlation Between Shaanxi Broadcast and BYD Co
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By analyzing existing cross correlation between Shaanxi Broadcast TV and BYD Co Ltd, you can compare the effects of market volatilities on Shaanxi Broadcast 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 Shaanxi Broadcast with a short position of BYD Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Broadcast and BYD Co.
Diversification Opportunities for Shaanxi Broadcast and BYD Co
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shaanxi and BYD is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Broadcast TV and BYD Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYD Co and Shaanxi Broadcast 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 Shaanxi Broadcast TV 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 Shaanxi Broadcast i.e., Shaanxi Broadcast and BYD Co go up and down completely randomly.
Pair Corralation between Shaanxi Broadcast and BYD Co
Assuming the 90 days trading horizon Shaanxi Broadcast TV is expected to under-perform the BYD Co. In addition to that, Shaanxi Broadcast is 1.46 times more volatile than BYD Co Ltd. It trades about -0.04 of its total potential returns per unit of risk. BYD Co Ltd is currently generating about 0.01 per unit of volatility. If you would invest 26,544 in BYD Co Ltd on September 2, 2024 and sell it today you would earn a total of 939.00 from holding BYD Co Ltd or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaanxi Broadcast TV vs. BYD Co Ltd
Performance |
| Timeline |
| Shaanxi Broadcast |
| BYD Co |
Shaanxi Broadcast and BYD Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Broadcast and BYD Co
The main advantage of trading using opposite Shaanxi Broadcast and BYD Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Broadcast 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.| Shaanxi Broadcast vs. China Petroleum Chemical | Shaanxi Broadcast vs. PetroChina Co Ltd | Shaanxi Broadcast vs. China State Construction | Shaanxi Broadcast vs. China Railway Group |
| BYD Co vs. Biwin Storage Technology | BYD Co vs. PetroChina Co Ltd | BYD Co vs. Industrial and Commercial | BYD Co vs. China Construction Bank |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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