Correlation Between DAX Index and BYD ELECTRONIC
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By analyzing existing cross correlation between DAX Index and BYD ELECTRONIC, you can compare the effects of market volatilities on DAX Index and BYD ELECTRONIC 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 DAX Index with a short position of BYD ELECTRONIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and BYD ELECTRONIC.
Diversification Opportunities for DAX Index and BYD ELECTRONIC
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and BYD is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and BYD ELECTRONIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYD ELECTRONIC and DAX Index 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 DAX Index are associated (or correlated) with BYD ELECTRONIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BYD ELECTRONIC has no effect on the direction of DAX Index i.e., DAX Index and BYD ELECTRONIC go up and down completely randomly.
Pair Corralation between DAX Index and BYD ELECTRONIC
Assuming the 90 days trading horizon DAX Index is expected to generate 3.12 times less return on investment than BYD ELECTRONIC. But when comparing it to its historical volatility, DAX Index is 5.01 times less risky than BYD ELECTRONIC. It trades about 0.08 of its potential returns per unit of risk. BYD ELECTRONIC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 235.00 in BYD ELECTRONIC on August 28, 2024 and sell it today you would earn a total of 178.00 from holding BYD ELECTRONIC or generate 75.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
DAX Index vs. BYD ELECTRONIC
Performance |
| Timeline |
DAX Index and BYD ELECTRONIC Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
BYD ELECTRONIC
Pair trading matchups for BYD ELECTRONIC
Pair Trading with DAX Index and BYD ELECTRONIC
The main advantage of trading using opposite DAX Index and BYD ELECTRONIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, BYD ELECTRONIC 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 BYD ELECTRONIC will offset losses from the drop in BYD ELECTRONIC's long position.| DAX Index vs. ELMOS SEMICONDUCTOR | DAX Index vs. ALTAIR RES INC | DAX Index vs. Fair Isaac Corp | DAX Index vs. Taiwan Semiconductor Manufacturing |
| BYD ELECTRONIC vs. Apple Inc | BYD ELECTRONIC vs. Apple Inc | BYD ELECTRONIC vs. Microsoft | BYD ELECTRONIC vs. Microsoft |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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