Correlation Between Aluminum Corp and BYD Co
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By analyzing existing cross correlation between Aluminum Corp of and BYD Co Ltd, you can compare the effects of market volatilities on Aluminum Corp 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 Aluminum Corp with a short position of BYD Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminum Corp and BYD Co.
Diversification Opportunities for Aluminum Corp and BYD Co
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aluminum and BYD is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum Corp of and BYD Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYD Co and Aluminum Corp 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 Aluminum Corp of 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 Aluminum Corp i.e., Aluminum Corp and BYD Co go up and down completely randomly.
Pair Corralation between Aluminum Corp and BYD Co
Assuming the 90 days trading horizon Aluminum Corp of is expected to generate 1.17 times more return on investment than BYD Co. However, Aluminum Corp is 1.17 times more volatile than BYD Co Ltd. It trades about 0.05 of its potential returns per unit of risk. BYD Co Ltd is currently generating about 0.04 per unit of risk. If you would invest 586.00 in Aluminum Corp of on September 12, 2024 and sell it today you would earn a total of 181.00 from holding Aluminum Corp of or generate 30.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aluminum Corp of vs. BYD Co Ltd
Performance |
| Timeline |
| Aluminum Corp |
| BYD Co |
Aluminum Corp and BYD Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminum Corp and BYD Co
The main advantage of trading using opposite Aluminum Corp and BYD Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminum Corp 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.| Aluminum Corp vs. Zijin Mining Group | Aluminum Corp vs. Wanhua Chemical Group | Aluminum Corp vs. Baoshan Iron Steel | Aluminum Corp vs. Rongsheng Petrochemical Co |
| BYD Co vs. Aluminum Corp of | BYD Co vs. Sino Platinum Metals Co | BYD Co vs. Shandong Publishing Media | BYD Co vs. Changjiang Publishing Media |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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