Correlation Between Nitto Denko and Yanzhou Coal
Can any of the company-specific risk be diversified away by investing in both Nitto Denko 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 Nitto Denko and Yanzhou Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nitto Denko Corp and Yanzhou Coal Mining, you can compare the effects of market volatilities on Nitto Denko 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 Nitto Denko with a short position of Yanzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nitto Denko and Yanzhou Coal.
Diversification Opportunities for Nitto Denko and Yanzhou Coal
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nitto and Yanzhou is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Nitto Denko Corp 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 Nitto Denko 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 Nitto Denko Corp 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 Nitto Denko i.e., Nitto Denko and Yanzhou Coal go up and down completely randomly.
Pair Corralation between Nitto Denko and Yanzhou Coal
Assuming the 90 days horizon Nitto Denko Corp is expected to generate 1.48 times more return on investment than Yanzhou Coal. However, Nitto Denko is 1.48 times more volatile than Yanzhou Coal Mining. It trades about 0.09 of its potential returns per unit of risk. Yanzhou Coal Mining is currently generating about -0.12 per unit of risk. If you would invest 1,885 in Nitto Denko Corp on November 27, 2024 and sell it today you would earn a total of 65.00 from holding Nitto Denko Corp or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Nitto Denko Corp vs. Yanzhou Coal Mining
Performance |
| Timeline |
| Nitto Denko Corp |
| Yanzhou Coal Mining |
Nitto Denko and Yanzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nitto Denko and Yanzhou Coal
The main advantage of trading using opposite Nitto Denko and Yanzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nitto Denko 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.| Nitto Denko vs. Chemours Co | Nitto Denko vs. International Flavors Fragrances | Nitto Denko vs. Air Products and | Nitto Denko vs. PPG Industries |
| Yanzhou Coal vs. Indo Tambangraya Megah | Yanzhou Coal vs. Bukit Asam Tbk | Yanzhou Coal vs. Geo Energy Resources | Yanzhou Coal vs. Yancoal Australia |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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