Correlation Between Jardine Matheson and BYD Co
Can any of the company-specific risk be diversified away by investing in both Jardine Matheson and BYD Co 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 Jardine Matheson and BYD Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jardine Matheson Holdings and BYD Co, you can compare the effects of market volatilities on Jardine Matheson and BYD Co 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 Jardine Matheson with a short position of BYD Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jardine Matheson and BYD Co.
Diversification Opportunities for Jardine Matheson and BYD Co
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Jardine and BYD is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Jardine Matheson Holdings and BYD Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYD Co and Jardine Matheson 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 Jardine Matheson Holdings are associated (or correlated) with BYD Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BYD Co has no effect on the direction of Jardine Matheson i.e., Jardine Matheson and BYD Co go up and down completely randomly.
Pair Corralation between Jardine Matheson and BYD Co
Assuming the 90 days trading horizon Jardine Matheson is expected to generate 96.23 times less return on investment than BYD Co. But when comparing it to its historical volatility, Jardine Matheson Holdings is 123.81 times less risky than BYD Co. It trades about 0.08 of its potential returns per unit of risk. BYD Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,708 in BYD Co on August 30, 2024 and sell it today you would earn a total of 852.00 from holding BYD Co or generate 31.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.75% |
| Values | Daily Returns |
Jardine Matheson Holdings vs. BYD Co
Performance |
| Timeline |
| Jardine Matheson Holdings |
| BYD Co |
Jardine Matheson and BYD Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jardine Matheson and BYD Co
The main advantage of trading using opposite Jardine Matheson and BYD Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jardine Matheson position performs unexpectedly, BYD Co 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 Co will offset losses from the drop in BYD Co's long position.| Jardine Matheson vs. Jupiter Green Investment | Jardine Matheson vs. Universal Music Group | Jardine Matheson vs. Zoom Video Communications | Jardine Matheson vs. Seraphim Space Investment |
| BYD Co vs. Lendinvest PLC | BYD Co vs. Neometals | BYD Co vs. Albion Technology General | BYD Co vs. Jupiter Fund Management |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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