Correlation Between BYD and Taylor Maritime

Can any of the company-specific risk be diversified away by investing in both BYD and Taylor Maritime 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 Taylor Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BYD Co and Taylor Maritime Investments, you can compare the effects of market volatilities on BYD and Taylor Maritime 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 Taylor Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD and Taylor Maritime.

Diversification Opportunities for BYD and Taylor Maritime

0.78

Correlation Coefficient

BYD  Taylor Maritime

Poor diversification

The 3 months correlation between BYD and Taylor is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co and Taylor Maritime Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taylor Maritime Inve 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 Taylor Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taylor Maritime Inve has no effect on the direction of BYD i.e., BYD and Taylor Maritime go up and down completely randomly.

Pair Corralation between BYD and Taylor Maritime

Assuming the 90 days trading horizon BYD Co is expected to generate 18.8 times more return on investment than Taylor Maritime. However, BYD is 18.8 times more volatile than Taylor Maritime Investments. It trades about 0.15 of its potential returns per unit of risk. Taylor Maritime Investments is currently generating about 0.12 per unit of risk. If you would invest  1,138  in BYD Co on April 25, 2025 and sell it today you would earn a total of  2,422  from holding BYD Co or generate 212.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

BYD Co  vs.  Taylor Maritime Investments

BYD Co

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BYD Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BYD unveiled solid returns over the last few months and may actually be approaching a breakup point.

Taylor Maritime Inve

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Taylor Maritime Investments are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Taylor Maritime unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BYD and Taylor Maritime

The main advantage of trading using opposite BYD and Taylor Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD position performs unexpectedly, Taylor Maritime 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 Taylor Maritime will offset losses from the drop in Taylor Maritime's long position.

The idea behind BYD Co and Taylor Maritime Investments 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.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.