Correlation Between Chuangs China and Yanzhou Coal
Can any of the company-specific risk be diversified away by investing in both Chuangs China 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 Chuangs China and Yanzhou Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chuangs China Investments and Yanzhou Coal Mining, you can compare the effects of market volatilities on Chuangs China 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 Chuangs China with a short position of Yanzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and Yanzhou Coal.
Diversification Opportunities for Chuangs China and Yanzhou Coal
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chuangs and Yanzhou is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments 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 Chuangs China 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 Chuangs China Investments 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 Chuangs China i.e., Chuangs China and Yanzhou Coal go up and down completely randomly.
Pair Corralation between Chuangs China and Yanzhou Coal
Assuming the 90 days horizon Chuangs China Investments is expected to under-perform the Yanzhou Coal. In addition to that, Chuangs China is 1.41 times more volatile than Yanzhou Coal Mining. It trades about -0.02 of its total potential returns per unit of risk. Yanzhou Coal Mining is currently generating about 0.03 per unit of volatility. If you would invest 897.00 in Yanzhou Coal Mining on September 13, 2024 and sell it today you would earn a total of 263.00 from holding Yanzhou Coal Mining or generate 29.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chuangs China Investments vs. Yanzhou Coal Mining
Performance |
| Timeline |
| Chuangs China Investments |
| Yanzhou Coal Mining |
Chuangs China and Yanzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and Yanzhou Coal
The main advantage of trading using opposite Chuangs China and Yanzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China 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.| Chuangs China vs. Superior Plus Corp | Chuangs China vs. SIVERS SEMICONDUCTORS AB | Chuangs China vs. Reliance Steel Aluminum | Chuangs China vs. CHINA HUARONG ENERHD 50 |
| Yanzhou Coal vs. Coor Service Management | Yanzhou Coal vs. Chuangs China Investments | Yanzhou Coal vs. Waste Management | Yanzhou Coal vs. CeoTronics AG |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |