Correlation Between Globex Mining and Yanzhou Coal
Can any of the company-specific risk be diversified away by investing in both Globex Mining 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 Globex Mining and Yanzhou Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globex Mining Enterprises and Yanzhou Coal Mining, you can compare the effects of market volatilities on Globex Mining 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 Globex Mining with a short position of Yanzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and Yanzhou Coal.
Diversification Opportunities for Globex Mining and Yanzhou Coal
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Globex and Yanzhou is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises 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 Globex Mining 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 Globex Mining Enterprises 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 Globex Mining i.e., Globex Mining and Yanzhou Coal go up and down completely randomly.
Pair Corralation between Globex Mining and Yanzhou Coal
Assuming the 90 days trading horizon Globex Mining Enterprises is expected to generate 1.47 times more return on investment than Yanzhou Coal. However, Globex Mining is 1.47 times more volatile than Yanzhou Coal Mining. It trades about 0.58 of its potential returns per unit of risk. Yanzhou Coal Mining is currently generating about -0.21 per unit of risk. If you would invest 79.00 in Globex Mining Enterprises on November 5, 2024 and sell it today you would earn a total of 27.00 from holding Globex Mining Enterprises or generate 34.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globex Mining Enterprises vs. Yanzhou Coal Mining
Performance |
| Timeline |
| Globex Mining Enterprises |
| Yanzhou Coal Mining |
Globex Mining and Yanzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and Yanzhou Coal
The main advantage of trading using opposite Globex Mining and Yanzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining 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.| Globex Mining vs. Apple Inc | Globex Mining vs. Apple Inc | Globex Mining vs. Apple Inc | Globex Mining vs. Apple Inc |
| Yanzhou Coal vs. MINCO SILVER | Yanzhou Coal vs. Perseus Mining Limited | Yanzhou Coal vs. KIMBALL ELECTRONICS | Yanzhou Coal vs. Nanjing Panda Electronics |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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