Correlation Between BYD and Jardine Matheson
Can any of the company-specific risk be diversified away by investing in both BYD and Jardine Matheson 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 and Jardine Matheson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BYD Co and Jardine Matheson Holdings, you can compare the effects of market volatilities on BYD and Jardine Matheson 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 with a short position of Jardine Matheson. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD and Jardine Matheson.
Diversification Opportunities for BYD and Jardine Matheson
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BYD and Jardine is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co and Jardine Matheson Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jardine Matheson Holdings and BYD 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 are associated (or correlated) with Jardine Matheson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jardine Matheson Holdings has no effect on the direction of BYD i.e., BYD and Jardine Matheson go up and down completely randomly.
Pair Corralation between BYD and Jardine Matheson
If you would invest 2,898 in BYD Co on September 24, 2024 and sell it today you would earn a total of 662.00 from holding BYD Co or generate 22.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
BYD Co vs. Jardine Matheson Holdings
Performance |
Timeline |
BYD Co |
Jardine Matheson Holdings |
BYD and Jardine Matheson Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BYD and Jardine Matheson
The main advantage of trading using opposite BYD and Jardine Matheson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD position performs unexpectedly, Jardine Matheson 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 Jardine Matheson will offset losses from the drop in Jardine Matheson's long position.The idea behind BYD Co and Jardine Matheson Holdings 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.Jardine Matheson vs. Uniper SE | Jardine Matheson vs. Mulberry Group PLC | Jardine Matheson vs. London Security Plc | Jardine Matheson vs. Triad Group PLC |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |