Correlation Between Banpu PCL and China Coal
Can any of the company-specific risk be diversified away by investing in both Banpu PCL and China 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 Banpu PCL and China Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banpu PCL and China Coal Energy, you can compare the effects of market volatilities on Banpu PCL and China 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 Banpu PCL with a short position of China Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banpu PCL and China Coal.
Diversification Opportunities for Banpu PCL and China Coal
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Banpu and China is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Banpu PCL and China Coal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Coal Energy and Banpu PCL 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 Banpu PCL are associated (or correlated) with China Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Coal Energy has no effect on the direction of Banpu PCL i.e., Banpu PCL and China Coal go up and down completely randomly.
Pair Corralation between Banpu PCL and China Coal
Assuming the 90 days trading horizon Banpu PCL is expected to under-perform the China Coal. In addition to that, Banpu PCL is 2.5 times more volatile than China Coal Energy. It trades about -0.1 of its total potential returns per unit of risk. China Coal Energy is currently generating about 0.07 per unit of volatility. If you would invest 112.00 in China Coal Energy on September 12, 2024 and sell it today you would earn a total of 4.00 from holding China Coal Energy or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banpu PCL vs. China Coal Energy
Performance |
| Timeline |
| Banpu PCL |
| China Coal Energy |
Banpu PCL and China Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banpu PCL and China Coal
The main advantage of trading using opposite Banpu PCL and China Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banpu PCL position performs unexpectedly, China 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 China Coal will offset losses from the drop in China Coal's long position.| Banpu PCL vs. CarsalesCom | Banpu PCL vs. Charter Communications | Banpu PCL vs. Salesforce | Banpu PCL vs. MUTUIONLINE |
| China Coal vs. MagnaChip Semiconductor Corp | China Coal vs. MOLSON RS BEVERAGE | China Coal vs. Tower Semiconductor | China Coal vs. Ebro Foods SA |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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