Correlation Between METTLER TOLEDO and YANZHOU COAL
Can any of the company-specific risk be diversified away by investing in both METTLER TOLEDO 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 METTLER TOLEDO and YANZHOU COAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between METTLER TOLEDO INTL and YANZHOU L H , you can compare the effects of market volatilities on METTLER TOLEDO 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 METTLER TOLEDO with a short position of YANZHOU COAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of METTLER TOLEDO and YANZHOU COAL.
Diversification Opportunities for METTLER TOLEDO and YANZHOU COAL
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between METTLER and YANZHOU is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding METTLER TOLEDO INTL and YANZHOU L H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YANZHOU COAL and METTLER TOLEDO 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 METTLER TOLEDO INTL 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 has no effect on the direction of METTLER TOLEDO i.e., METTLER TOLEDO and YANZHOU COAL go up and down completely randomly.
Pair Corralation between METTLER TOLEDO and YANZHOU COAL
Assuming the 90 days trading horizon METTLER TOLEDO is expected to generate 2.52 times less return on investment than YANZHOU COAL. But when comparing it to its historical volatility, METTLER TOLEDO INTL is 1.59 times less risky than YANZHOU COAL. It trades about 0.01 of its potential returns per unit of risk. YANZHOU L H is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 112.00 in YANZHOU L H on August 27, 2024 and sell it today you would lose (1.00) from holding YANZHOU L H or give up 0.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
METTLER TOLEDO INTL vs. YANZHOU L H
Performance |
| Timeline |
| METTLER TOLEDO INTL |
| YANZHOU COAL |
METTLER TOLEDO and YANZHOU COAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with METTLER TOLEDO and YANZHOU COAL
The main advantage of trading using opposite METTLER TOLEDO and YANZHOU COAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METTLER TOLEDO 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.| METTLER TOLEDO vs. Meli Hotels International | METTLER TOLEDO vs. GALENA MINING LTD | METTLER TOLEDO vs. MCEWEN MINING INC | METTLER TOLEDO vs. Choice Hotels International |
| YANZHOU COAL vs. Perdoceo Education | YANZHOU COAL vs. Fast Retailing Co | YANZHOU COAL vs. Canon Marketing Japan | YANZHOU COAL vs. CAREER EDUCATION |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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