Correlation Between AOYAMA TRADING and Yanzhou Coal
Can any of the company-specific risk be diversified away by investing in both AOYAMA TRADING and Yanzhou Coal 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 AOYAMA TRADING and Yanzhou Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AOYAMA TRADING and Yanzhou Coal Mining, you can compare the effects of market volatilities on AOYAMA TRADING and Yanzhou Coal 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 AOYAMA TRADING with a short position of Yanzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOYAMA TRADING and Yanzhou Coal.
Diversification Opportunities for AOYAMA TRADING and Yanzhou Coal
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AOYAMA and Yanzhou is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding AOYAMA TRADING and Yanzhou Coal Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yanzhou Coal Mining and AOYAMA TRADING 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 AOYAMA TRADING are associated (or correlated) with Yanzhou Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yanzhou Coal Mining has no effect on the direction of AOYAMA TRADING i.e., AOYAMA TRADING and Yanzhou Coal go up and down completely randomly.
Pair Corralation between AOYAMA TRADING and Yanzhou Coal
Assuming the 90 days horizon AOYAMA TRADING is expected to generate 1.39 times more return on investment than Yanzhou Coal. However, AOYAMA TRADING is 1.39 times more volatile than Yanzhou Coal Mining. It trades about 0.08 of its potential returns per unit of risk. Yanzhou Coal Mining is currently generating about 0.06 per unit of risk. If you would invest 447.00 in AOYAMA TRADING on September 12, 2024 and sell it today you would earn a total of 963.00 from holding AOYAMA TRADING or generate 215.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AOYAMA TRADING vs. Yanzhou Coal Mining
Performance |
| Timeline |
| AOYAMA TRADING |
| Yanzhou Coal Mining |
AOYAMA TRADING and Yanzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOYAMA TRADING and Yanzhou Coal
The main advantage of trading using opposite AOYAMA TRADING and Yanzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOYAMA TRADING position performs unexpectedly, Yanzhou Coal 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 Yanzhou Coal will offset losses from the drop in Yanzhou Coal's long position.| AOYAMA TRADING vs. ARROW ELECTRONICS | AOYAMA TRADING vs. STMicroelectronics NV | AOYAMA TRADING vs. AOI Electronics Co | AOYAMA TRADING vs. DALATA HOTEL |
| Yanzhou Coal vs. Playa Hotels Resorts | Yanzhou Coal vs. AOYAMA TRADING | Yanzhou Coal vs. PLAYSTUDIOS A DL 0001 | Yanzhou Coal vs. Virtus Investment Partners |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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