Correlation Between BYD Co and Faraday Future
Can any of the company-specific risk be diversified away by investing in both BYD Co and Faraday Future 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 Faraday Future 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 Faraday Future Intelligent, you can compare the effects of market volatilities on BYD Co and Faraday Future 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 Faraday Future. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Faraday Future.
Diversification Opportunities for BYD Co and Faraday Future
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BYD and Faraday is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Faraday Future Intelligent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Faraday Future Intel 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 Faraday Future. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Faraday Future Intel has no effect on the direction of BYD Co i.e., BYD Co and Faraday Future go up and down completely randomly.
Pair Corralation between BYD Co and Faraday Future
Assuming the 90 days horizon BYD Co Ltd is expected to generate 0.3 times more return on investment than Faraday Future. However, BYD Co Ltd is 3.37 times less risky than Faraday Future. It trades about 0.1 of its potential returns per unit of risk. Faraday Future Intelligent is currently generating about -0.2 per unit of risk. If you would invest 5,668 in BYD Co Ltd on August 28, 2024 and sell it today you would earn a total of 992.00 from holding BYD Co Ltd or generate 17.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYD Co Ltd vs. Faraday Future Intelligent
Performance |
| Timeline |
| BYD Co |
| Faraday Future Intel |
BYD Co and Faraday Future Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and Faraday Future
The main advantage of trading using opposite BYD Co and Faraday Future positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Faraday Future 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 Faraday Future will offset losses from the drop in Faraday Future's long position.| BYD Co vs. FitLife Brands, Common | BYD Co vs. HUMANA INC | BYD Co vs. SCOR PK | BYD Co vs. Aquagold International |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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