Correlation Between MAG SILVER and Yanzhou Coal
Can any of the company-specific risk be diversified away by investing in both MAG SILVER 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 MAG SILVER and Yanzhou Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAG SILVER and Yanzhou Coal Mining, you can compare the effects of market volatilities on MAG SILVER 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 MAG SILVER with a short position of Yanzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG SILVER and Yanzhou Coal.
Diversification Opportunities for MAG SILVER and Yanzhou Coal
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MAG and Yanzhou is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding MAG SILVER 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 MAG SILVER 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 MAG SILVER 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 MAG SILVER i.e., MAG SILVER and Yanzhou Coal go up and down completely randomly.
Pair Corralation between MAG SILVER and Yanzhou Coal
Assuming the 90 days trading horizon MAG SILVER is expected to generate 1.04 times more return on investment than Yanzhou Coal. However, MAG SILVER is 1.04 times more volatile than Yanzhou Coal Mining. It trades about -0.19 of its potential returns per unit of risk. Yanzhou Coal Mining is currently generating about -0.25 per unit of risk. If you would invest 1,499 in MAG SILVER on October 11, 2024 and sell it today you would lose (107.00) from holding MAG SILVER or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAG SILVER vs. Yanzhou Coal Mining
Performance |
| Timeline |
| MAG SILVER |
| Yanzhou Coal Mining |
MAG SILVER and Yanzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG SILVER and Yanzhou Coal
The main advantage of trading using opposite MAG SILVER and Yanzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG SILVER 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.| MAG SILVER vs. Cincinnati Financial Corp | MAG SILVER vs. The Hanover Insurance | MAG SILVER vs. SUN LIFE FINANCIAL | MAG SILVER vs. National Beverage Corp |
| Yanzhou Coal vs. FIREWEED METALS P | Yanzhou Coal vs. BII Railway Transportation | Yanzhou Coal vs. Columbia Sportswear | Yanzhou Coal vs. SCIENCE IN SPORT |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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