Correlation Between BAIYU Holdings and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both BAIYU Holdings and Arrow Electronics 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 BAIYU Holdings and Arrow Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BAIYU Holdings and Arrow Electronics, you can compare the effects of market volatilities on BAIYU Holdings and Arrow Electronics 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 BAIYU Holdings with a short position of Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAIYU Holdings and Arrow Electronics.
Diversification Opportunities for BAIYU Holdings and Arrow Electronics
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BAIYU and Arrow is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding BAIYU Holdings and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics and BAIYU Holdings 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 BAIYU Holdings are associated (or correlated) with Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of BAIYU Holdings i.e., BAIYU Holdings and Arrow Electronics go up and down completely randomly.
Pair Corralation between BAIYU Holdings and Arrow Electronics
Considering the 90-day investment horizon BAIYU Holdings is expected to under-perform the Arrow Electronics. In addition to that, BAIYU Holdings is 5.27 times more volatile than Arrow Electronics. It trades about -0.08 of its total potential returns per unit of risk. Arrow Electronics is currently generating about 0.02 per unit of volatility. If you would invest 10,582 in Arrow Electronics on August 27, 2024 and sell it today you would earn a total of 1,344 from holding Arrow Electronics or generate 12.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
BAIYU Holdings vs. Arrow Electronics
Performance |
| Timeline |
| BAIYU Holdings |
| Arrow Electronics |
BAIYU Holdings and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BAIYU Holdings and Arrow Electronics
The main advantage of trading using opposite BAIYU Holdings and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAIYU Holdings position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.| BAIYU Holdings vs. Arrow Electronics | BAIYU Holdings vs. BioNTech SE | BAIYU Holdings vs. Alvotech | BAIYU Holdings vs. ServiceNow |
| Arrow Electronics vs. Insight Enterprises | Arrow Electronics vs. Synnex | Arrow Electronics vs. Climb Global Solutions | Arrow Electronics vs. ScanSource |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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