Correlation Between Youyou Foods and BYD Co
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By analyzing existing cross correlation between Youyou Foods Co and BYD Co Ltd, you can compare the effects of market volatilities on Youyou Foods 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 Youyou Foods with a short position of BYD Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youyou Foods and BYD Co.
Diversification Opportunities for Youyou Foods and BYD Co
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Youyou and BYD is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Youyou Foods 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 Youyou Foods 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 Youyou Foods 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 Youyou Foods i.e., Youyou Foods and BYD Co go up and down completely randomly.
Pair Corralation between Youyou Foods and BYD Co
Assuming the 90 days trading horizon Youyou Foods Co is expected to generate 2.75 times more return on investment than BYD Co. However, Youyou Foods is 2.75 times more volatile than BYD Co Ltd. It trades about 0.28 of its potential returns per unit of risk. BYD Co Ltd is currently generating about -0.23 per unit of risk. If you would invest 735.00 in Youyou Foods Co on August 27, 2024 and sell it today you would earn a total of 232.00 from holding Youyou Foods Co or generate 31.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youyou Foods Co vs. BYD Co Ltd
Performance |
| Timeline |
| Youyou Foods |
| BYD Co |
Youyou Foods and BYD Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youyou Foods and BYD Co
The main advantage of trading using opposite Youyou Foods and BYD Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youyou Foods 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.| Youyou Foods vs. China Petroleum Chemical | Youyou Foods vs. PetroChina Co Ltd | Youyou Foods vs. China State Construction | Youyou Foods vs. China Railway Group |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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