Correlation Between TerraCom and Yancoal Australia
Can any of the company-specific risk be diversified away by investing in both TerraCom and Yancoal Australia 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 TerraCom and Yancoal Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TerraCom Limited and Yancoal Australia, you can compare the effects of market volatilities on TerraCom and Yancoal Australia 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 TerraCom with a short position of Yancoal Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of TerraCom and Yancoal Australia.
Diversification Opportunities for TerraCom and Yancoal Australia
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TerraCom and Yancoal is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding TerraCom Limited and Yancoal Australia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yancoal Australia and TerraCom 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 TerraCom Limited are associated (or correlated) with Yancoal Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yancoal Australia has no effect on the direction of TerraCom i.e., TerraCom and Yancoal Australia go up and down completely randomly.
Pair Corralation between TerraCom and Yancoal Australia
Assuming the 90 days horizon TerraCom Limited is expected to under-perform the Yancoal Australia. In addition to that, TerraCom is 2.36 times more volatile than Yancoal Australia. It trades about 0.0 of its total potential returns per unit of risk. Yancoal Australia is currently generating about 0.06 per unit of volatility. If you would invest 253.00 in Yancoal Australia on August 31, 2024 and sell it today you would earn a total of 182.00 from holding Yancoal Australia or generate 71.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 32.7% |
| Values | Daily Returns |
TerraCom Limited vs. Yancoal Australia
Performance |
| Timeline |
| TerraCom Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Yancoal Australia |
TerraCom and Yancoal Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TerraCom and Yancoal Australia
The main advantage of trading using opposite TerraCom and Yancoal Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TerraCom position performs unexpectedly, Yancoal Australia 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 Yancoal Australia will offset losses from the drop in Yancoal Australia's long position.| TerraCom vs. Indo Tambangraya Megah | TerraCom vs. Adaro Energy Tbk | TerraCom vs. Thungela Resources Limited | TerraCom vs. China Shenhua Energy |
| Yancoal Australia vs. Legacy Education | Yancoal Australia vs. Apple Inc | Yancoal Australia vs. NVIDIA | Yancoal Australia vs. Microsoft |
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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