Correlation Between China Coal and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both China Coal and Gladstone Investment 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 China Coal and Gladstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Coal Energy and Gladstone Investment, you can compare the effects of market volatilities on China Coal and Gladstone Investment 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 China Coal with a short position of Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Coal and Gladstone Investment.
Diversification Opportunities for China Coal and Gladstone Investment
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Gladstone is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding China Coal Energy and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and China Coal 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 China Coal Energy are associated (or correlated) with Gladstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Investment has no effect on the direction of China Coal i.e., China Coal and Gladstone Investment go up and down completely randomly.
Pair Corralation between China Coal and Gladstone Investment
Assuming the 90 days horizon China Coal Energy is expected to under-perform the Gladstone Investment. In addition to that, China Coal is 1.66 times more volatile than Gladstone Investment. It trades about -0.11 of its total potential returns per unit of risk. Gladstone Investment is currently generating about -0.13 per unit of volatility. If you would invest 1,290 in Gladstone Investment on September 23, 2024 and sell it today you would lose (47.00) from holding Gladstone Investment or give up 3.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Coal Energy vs. Gladstone Investment
Performance |
| Timeline |
| China Coal Energy |
| Gladstone Investment |
China Coal and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Coal and Gladstone Investment
The main advantage of trading using opposite China Coal and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Coal position performs unexpectedly, Gladstone Investment 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 Gladstone Investment will offset losses from the drop in Gladstone Investment's long position.| China Coal vs. CHINA SHENHUA ENA | China Coal vs. Yancoal Australia | China Coal vs. Banpu PCL | China Coal vs. CONSOL Energy |
| Gladstone Investment vs. ATHENE HOLDING PRFSERC | Gladstone Investment vs. China Coal Energy | Gladstone Investment vs. WOOLWORTHS HLDGS | Gladstone Investment vs. International Business Machines |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |