Correlation Between NYSE Composite and China Coal
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and China Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and China Coal Energy, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of China Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and China Coal.
Diversification Opportunities for NYSE Composite and China Coal
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and China is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and China Coal go up and down completely randomly.
Pair Corralation between NYSE Composite and China Coal
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.23 times more return on investment than China Coal. However, NYSE Composite is 4.32 times less risky than China Coal. It trades about 0.32 of its potential returns per unit of risk. China Coal Energy is currently generating about -0.11 per unit of risk. If you would invest 1,924,074 in NYSE Composite on November 9, 2024 and sell it today you would earn a total of 91,684 from holding NYSE Composite or generate 4.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. China Coal Energy
Performance |
| Timeline |
NYSE Composite and China Coal Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
China Coal Energy
Pair trading matchups for China Coal
Pair Trading with NYSE Composite and China Coal
The main advantage of trading using opposite NYSE Composite and China Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Integrated Media Technology | NYSE Composite vs. Custom Truck One | NYSE Composite vs. Funko Inc | NYSE Composite vs. Multi Ways Holdings |
| China Coal vs. Amgen Inc | China Coal vs. Cytek Biosciences | China Coal vs. Delek Logistics Partners | China Coal vs. Yuexiu Transport Infrastructure |
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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