Correlation Between BYD Co and Exor NV
Can any of the company-specific risk be diversified away by investing in both BYD Co and Exor NV 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 Co and Exor NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BYD Co Ltd and Exor NV, you can compare the effects of market volatilities on BYD Co and Exor NV 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 Co with a short position of Exor NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Exor NV.
Diversification Opportunities for BYD Co and Exor NV
Very good diversification
The 3 months correlation between BYD and Exor is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Exor NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exor NV and BYD Co 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 Co Ltd are associated (or correlated) with Exor NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exor NV has no effect on the direction of BYD Co i.e., BYD Co and Exor NV go up and down completely randomly.
Pair Corralation between BYD Co and Exor NV
Assuming the 90 days horizon BYD Co Ltd is expected to under-perform the Exor NV. In addition to that, BYD Co is 1.27 times more volatile than Exor NV. It trades about -0.29 of its total potential returns per unit of risk. Exor NV is currently generating about -0.12 per unit of volatility. If you would invest 10,762 in Exor NV on August 28, 2024 and sell it today you would lose (484.00) from holding Exor NV or give up 4.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYD Co Ltd vs. Exor NV
Performance |
| Timeline |
| BYD Co |
| Exor NV |
BYD Co and Exor NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and Exor NV
The main advantage of trading using opposite BYD Co and Exor NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Exor NV 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 Exor NV will offset losses from the drop in Exor NV's long position.| BYD Co vs. FitLife Brands, Common | BYD Co vs. HUMANA INC | BYD Co vs. SCOR PK | BYD Co vs. Aquagold International |
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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 Stocks Directory module to find actively traded stocks across global markets.
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