Correlation Between BYD Co and Semler Scientific
Can any of the company-specific risk be diversified away by investing in both BYD Co and Semler Scientific 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 Semler Scientific 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 Semler Scientific, you can compare the effects of market volatilities on BYD Co and Semler Scientific 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 Semler Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Co and Semler Scientific.
Diversification Opportunities for BYD Co and Semler Scientific
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BYD and Semler is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co Ltd and Semler Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semler Scientific 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 Semler Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semler Scientific has no effect on the direction of BYD Co i.e., BYD Co and Semler Scientific go up and down completely randomly.
Pair Corralation between BYD Co and Semler Scientific
Assuming the 90 days horizon BYD Co is expected to generate 3.98 times less return on investment than Semler Scientific. But when comparing it to its historical volatility, BYD Co Ltd is 2.36 times less risky than Semler Scientific. It trades about 0.03 of its potential returns per unit of risk. Semler Scientific is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,644 in Semler Scientific on October 10, 2024 and sell it today you would earn a total of 1,880 from holding Semler Scientific or generate 51.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYD Co Ltd vs. Semler Scientific
Performance |
| Timeline |
| BYD Co |
| Semler Scientific |
BYD Co and Semler Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Co and Semler Scientific
The main advantage of trading using opposite BYD Co and Semler Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Co position performs unexpectedly, Semler Scientific 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 Semler Scientific will offset losses from the drop in Semler Scientific's long position.The idea behind BYD Co Ltd and Semler Scientific pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Semler Scientific vs. CVRx Inc | Semler Scientific vs. SurModics | Semler Scientific vs. Pulmonx Corp | Semler Scientific vs. Orthofix Medical |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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