Correlation Between Steel Dynamics and Yanzhou Coal
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics 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 Steel Dynamics and Yanzhou Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and Yanzhou Coal Mining, you can compare the effects of market volatilities on Steel Dynamics 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 Steel Dynamics with a short position of Yanzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Yanzhou Coal.
Diversification Opportunities for Steel Dynamics and Yanzhou Coal
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Steel and Yanzhou is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics 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 Steel Dynamics 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 Steel Dynamics 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 Steel Dynamics i.e., Steel Dynamics and Yanzhou Coal go up and down completely randomly.
Pair Corralation between Steel Dynamics and Yanzhou Coal
Given the investment horizon of 90 days Steel Dynamics is expected to generate 2.01 times more return on investment than Yanzhou Coal. However, Steel Dynamics is 2.01 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 -0.22 per unit of risk. If you would invest 13,358 in Steel Dynamics on September 5, 2024 and sell it today you would earn a total of 780.00 from holding Steel Dynamics or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Steel Dynamics vs. Yanzhou Coal Mining
Performance |
| Timeline |
| Steel Dynamics |
| Yanzhou Coal Mining |
Steel Dynamics and Yanzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Yanzhou Coal
The main advantage of trading using opposite Steel Dynamics and Yanzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics 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.| Steel Dynamics vs. Cleveland Cliffs | Steel Dynamics vs. United States Steel | Steel Dynamics vs. ArcelorMittal SA ADR | Steel Dynamics vs. Reliance Steel Aluminum |
| Yanzhou Coal vs. PT Bayan Resources | Yanzhou Coal vs. Yanzhou Coal Mining | Yanzhou Coal vs. PT Adaro Energy | Yanzhou Coal vs. PT Bumi Resources |
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.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |