Correlation Between AYRO and BYD Co
Can any of the company-specific risk be diversified away by investing in both AYRO 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 AYRO and BYD Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AYRO Inc and BYD Co Ltd, you can compare the effects of market volatilities on AYRO 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 AYRO with a short position of BYD Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of AYRO and BYD Co.
Diversification Opportunities for AYRO and BYD Co
Excellent diversification
The 3 months correlation between AYRO and BYD is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding AYRO Inc and BYD Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYD Co and AYRO 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 AYRO Inc 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 AYRO i.e., AYRO and BYD Co go up and down completely randomly.
Pair Corralation between AYRO and BYD Co
Given the investment horizon of 90 days AYRO Inc is expected to under-perform the BYD Co. In addition to that, AYRO is 1.82 times more volatile than BYD Co Ltd. It trades about -0.04 of its total potential returns per unit of risk. BYD Co Ltd is currently generating about 0.01 per unit of volatility. If you would invest 5,908 in BYD Co Ltd on January 31, 2024 and sell it today you would lose (476.00) from holding BYD Co Ltd or give up 8.06% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
AYRO Inc vs. BYD Co Ltd
Performance |
Timeline |
AYRO Inc |
BYD Co |
AYRO and BYD Co Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AYRO and BYD Co
The main advantage of trading using opposite AYRO and BYD Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AYRO 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.The idea behind AYRO Inc and BYD Co Ltd 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.BYD Co vs. Compagnie Gnrale des | BYD Co vs. Bridgestone Corp ADR | BYD Co vs. Continental Aktiengesellschaft | BYD Co vs. Douglas Dynamics |
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.
Other Complementary Tools
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |