Correlation Between Kingclean Electric and BYD Co
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By analyzing existing cross correlation between Kingclean Electric Co and BYD Co Ltd, you can compare the effects of market volatilities on Kingclean Electric 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 Kingclean Electric with a short position of BYD Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingclean Electric and BYD Co.
Diversification Opportunities for Kingclean Electric and BYD Co
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kingclean and BYD is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Kingclean Electric Co and BYD Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYD Co and Kingclean Electric 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 Kingclean Electric Co 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 Kingclean Electric i.e., Kingclean Electric and BYD Co go up and down completely randomly.
Pair Corralation between Kingclean Electric and BYD Co
Assuming the 90 days trading horizon Kingclean Electric is expected to generate 1.16 times less return on investment than BYD Co. But when comparing it to its historical volatility, Kingclean Electric Co is 1.04 times less risky than BYD Co. It trades about 0.09 of its potential returns per unit of risk. BYD Co Ltd is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 24,110 in BYD Co Ltd on September 2, 2024 and sell it today you would earn a total of 3,373 from holding BYD Co Ltd or generate 13.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingclean Electric Co vs. BYD Co Ltd
Performance |
| Timeline |
| Kingclean Electric |
| BYD Co |
Kingclean Electric and BYD Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingclean Electric and BYD Co
The main advantage of trading using opposite Kingclean Electric and BYD Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingclean Electric 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.| Kingclean Electric vs. Semiconductor Manufacturing Intl | Kingclean Electric vs. Anhui Conch Cement | Kingclean Electric vs. Shenzhen New Nanshan | Kingclean Electric vs. Sichuan Tianqi Lithium |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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