Correlation Between Hermès International and Yanzhou Coal
Can any of the company-specific risk be diversified away by investing in both Hermès International 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 Hermès International and Yanzhou Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Herms International Socit and Yanzhou Coal Mining, you can compare the effects of market volatilities on Hermès International 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 Hermès International with a short position of Yanzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hermès International and Yanzhou Coal.
Diversification Opportunities for Hermès International and Yanzhou Coal
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hermès and Yanzhou is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Herms International Socit 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 Hermès International 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 Herms International Socit 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 Hermès International i.e., Hermès International and Yanzhou Coal go up and down completely randomly.
Pair Corralation between Hermès International and Yanzhou Coal
Assuming the 90 days horizon Herms International Socit is expected to generate 0.82 times more return on investment than Yanzhou Coal. However, Herms International Socit is 1.22 times less risky than Yanzhou Coal. It trades about 0.19 of its potential returns per unit of risk. Yanzhou Coal Mining is currently generating about -0.33 per unit of risk. If you would invest 225,500 in Herms International Socit on October 15, 2024 and sell it today you would earn a total of 11,800 from holding Herms International Socit or generate 5.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Herms International Socit vs. Yanzhou Coal Mining
Performance |
| Timeline |
| Herms International Socit |
| Yanzhou Coal Mining |
Hermès International and Yanzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hermès International and Yanzhou Coal
The main advantage of trading using opposite Hermès International and Yanzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hermès International 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.| Hermès International vs. Eurasia Mining Plc | Hermès International vs. Mitsui Chemicals | Hermès International vs. Yanzhou Coal Mining | Hermès International vs. SILICON LABORATOR |
| Yanzhou Coal vs. GREENX METALS LTD | Yanzhou Coal vs. FIREWEED METALS P | Yanzhou Coal vs. Forsys Metals Corp | Yanzhou Coal vs. CARSALESCOM |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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