Correlation Between Wayside Technology and Yanzhou Coal
Can any of the company-specific risk be diversified away by investing in both Wayside Technology 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 Wayside Technology and Yanzhou Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wayside Technology Group and Yanzhou Coal Mining, you can compare the effects of market volatilities on Wayside Technology 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 Wayside Technology with a short position of Yanzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wayside Technology and Yanzhou Coal.
Diversification Opportunities for Wayside Technology and Yanzhou Coal
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wayside and Yanzhou is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Wayside Technology Group 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 Wayside Technology 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 Wayside Technology Group 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 Wayside Technology i.e., Wayside Technology and Yanzhou Coal go up and down completely randomly.
Pair Corralation between Wayside Technology and Yanzhou Coal
Assuming the 90 days horizon Wayside Technology Group is expected to generate 0.96 times more return on investment than Yanzhou Coal. However, Wayside Technology Group is 1.04 times less risky than Yanzhou Coal. It trades about 0.14 of its potential returns per unit of risk. Yanzhou Coal Mining is currently generating about 0.02 per unit of risk. If you would invest 4,836 in Wayside Technology Group on September 4, 2024 and sell it today you would earn a total of 7,764 from holding Wayside Technology Group or generate 160.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Wayside Technology Group vs. Yanzhou Coal Mining
Performance |
| Timeline |
| Wayside Technology |
| Yanzhou Coal Mining |
Wayside Technology and Yanzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wayside Technology and Yanzhou Coal
The main advantage of trading using opposite Wayside Technology and Yanzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wayside Technology 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.| Wayside Technology vs. MCEWEN MINING INC | Wayside Technology vs. COMBA TELECOM SYST | Wayside Technology vs. Consolidated Communications Holdings | Wayside Technology vs. Tower One Wireless |
| Yanzhou Coal vs. AECOM TECHNOLOGY | Yanzhou Coal vs. Consolidated Communications Holdings | Yanzhou Coal vs. Wayside Technology Group | Yanzhou Coal vs. MACOM Technology Solutions |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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