Correlation Between Jiangsu Broadcasting and BYD Co
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By analyzing existing cross correlation between Jiangsu Broadcasting Cable and BYD Co Ltd, you can compare the effects of market volatilities on Jiangsu Broadcasting 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 Jiangsu Broadcasting with a short position of BYD Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Broadcasting and BYD Co.
Diversification Opportunities for Jiangsu Broadcasting and BYD Co
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiangsu and BYD is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Broadcasting Cable and BYD Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYD Co and Jiangsu Broadcasting 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 Jiangsu Broadcasting Cable 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 Jiangsu Broadcasting i.e., Jiangsu Broadcasting and BYD Co go up and down completely randomly.
Pair Corralation between Jiangsu Broadcasting and BYD Co
Assuming the 90 days trading horizon Jiangsu Broadcasting Cable is expected to under-perform the BYD Co. But the stock apears to be less risky and, when comparing its historical volatility, Jiangsu Broadcasting Cable is 1.15 times less risky than BYD Co. The stock trades about -0.01 of its potential returns per unit of risk. The BYD Co Ltd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 24,599 in BYD Co Ltd on August 31, 2024 and sell it today you would earn a total of 2,859 from holding BYD Co Ltd or generate 11.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu Broadcasting Cable vs. BYD Co Ltd
Performance |
| Timeline |
| Jiangsu Broadcasting |
| BYD Co |
Jiangsu Broadcasting and BYD Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Broadcasting and BYD Co
The main advantage of trading using opposite Jiangsu Broadcasting and BYD Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Broadcasting 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.| Jiangsu Broadcasting vs. BYD Co Ltd | Jiangsu Broadcasting vs. Agricultural Bank of | Jiangsu Broadcasting vs. Industrial and Commercial | Jiangsu Broadcasting 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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