Correlation Between PT Bank and Yanzhou Coal
Can any of the company-specific risk be diversified away by investing in both PT Bank 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 PT Bank and Yanzhou Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Rakyat and Yanzhou Coal Mining, you can compare the effects of market volatilities on PT Bank 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 PT Bank with a short position of Yanzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Yanzhou Coal.
Diversification Opportunities for PT Bank and Yanzhou Coal
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BKRKF and Yanzhou is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat 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 PT Bank 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 PT Bank Rakyat 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 PT Bank i.e., PT Bank and Yanzhou Coal go up and down completely randomly.
Pair Corralation between PT Bank and Yanzhou Coal
Assuming the 90 days horizon PT Bank Rakyat is expected to generate 51.78 times more return on investment than Yanzhou Coal. However, PT Bank is 51.78 times more volatile than Yanzhou Coal Mining. It trades about 0.0 of its potential returns per unit of risk. Yanzhou Coal Mining is currently generating about -0.22 per unit of risk. If you would invest 29.00 in PT Bank Rakyat on August 28, 2024 and sell it today you would lose (2.00) from holding PT Bank Rakyat or give up 6.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Yanzhou Coal Mining
Performance |
| Timeline |
| PT Bank Rakyat |
| Yanzhou Coal Mining |
PT Bank and Yanzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Yanzhou Coal
The main advantage of trading using opposite PT Bank and Yanzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank 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.The idea behind PT Bank Rakyat and Yanzhou Coal Mining 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.| Yanzhou Coal vs. Geo Energy Resources | Yanzhou Coal vs. Indo Tambangraya Megah | Yanzhou Coal vs. Bukit Asam Tbk | Yanzhou Coal vs. Thungela Resources Limited |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |