Correlation Between BYD Company and CYIOS
Can any of the company-specific risk be diversified away by investing in both BYD Company and CYIOS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining BYD Company and CYIOS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BYD Company Limited and CYIOS, you can compare the effects of market volatilities on BYD Company and CYIOS 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 BYD Company with a short position of CYIOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Company and CYIOS.
Diversification Opportunities for BYD Company and CYIOS
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BYD and CYIOS is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding BYD Company Limited and CYIOS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CYIOS and BYD Company 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 BYD Company Limited are associated (or correlated) with CYIOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CYIOS has no effect on the direction of BYD Company i.e., BYD Company and CYIOS go up and down completely randomly.
Pair Corralation between BYD Company and CYIOS
Assuming the 90 days horizon BYD Company Limited is expected to under-perform the CYIOS. But the pink sheet apears to be less risky and, when comparing its historical volatility, BYD Company Limited is 2.95 times less risky than CYIOS. The pink sheet trades about -0.27 of its potential returns per unit of risk. The CYIOS is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 1.11 in CYIOS on August 30, 2024 and sell it today you would lose (0.15) from holding CYIOS or give up 13.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYD Company Limited vs. CYIOS
Performance |
| Timeline |
| BYD Limited |
| CYIOS |
BYD Company and CYIOS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Company and CYIOS
The main advantage of trading using opposite BYD Company and CYIOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Company position performs unexpectedly, CYIOS 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 CYIOS will offset losses from the drop in CYIOS's long position.| BYD Company vs. Li Auto | BYD Company vs. Xpeng Inc | BYD Company vs. Rivian Automotive | BYD Company vs. Nio Class A |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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