Correlation Between Chengdu B and BYD Co
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By analyzing existing cross correlation between Chengdu B ray Media and BYD Co Ltd, you can compare the effects of market volatilities on Chengdu B 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 Chengdu B with a short position of BYD Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu B and BYD Co.
Diversification Opportunities for Chengdu B and BYD Co
Very poor diversification
The 3 months correlation between Chengdu and BYD is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu B ray Media and BYD Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYD Co and Chengdu B 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 Chengdu B ray Media 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 Chengdu B i.e., Chengdu B and BYD Co go up and down completely randomly.
Pair Corralation between Chengdu B and BYD Co
Assuming the 90 days trading horizon Chengdu B ray Media is expected to generate 1.52 times more return on investment than BYD Co. However, Chengdu B is 1.52 times more volatile than BYD Co Ltd. It trades about 0.15 of its potential returns per unit of risk. BYD Co Ltd is currently generating about -0.25 per unit of risk. If you would invest 463.00 in Chengdu B ray Media on August 31, 2024 and sell it today you would earn a total of 41.00 from holding Chengdu B ray Media or generate 8.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu B ray Media vs. BYD Co Ltd
Performance |
| Timeline |
| Chengdu B ray |
| BYD Co |
Chengdu B and BYD Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu B and BYD Co
The main advantage of trading using opposite Chengdu B and BYD Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu B 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.| Chengdu B vs. BYD Co Ltd | Chengdu B vs. Agricultural Bank of | Chengdu B vs. Industrial and Commercial | Chengdu B vs. China State Construction |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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