Correlation Between Westwater Resources and Yanzhou Coal
Can any of the company-specific risk be diversified away by investing in both Westwater Resources 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 Westwater Resources and Yanzhou Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westwater Resources and Yanzhou Coal Mining, you can compare the effects of market volatilities on Westwater Resources 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 Westwater Resources with a short position of Yanzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westwater Resources and Yanzhou Coal.
Diversification Opportunities for Westwater Resources and Yanzhou Coal
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Westwater and Yanzhou is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Westwater Resources 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 Westwater Resources 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 Westwater Resources 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 Westwater Resources i.e., Westwater Resources and Yanzhou Coal go up and down completely randomly.
Pair Corralation between Westwater Resources and Yanzhou Coal
Assuming the 90 days trading horizon Westwater Resources is expected to generate 1.32 times more return on investment than Yanzhou Coal. However, Westwater Resources is 1.32 times more volatile than Yanzhou Coal Mining. It trades about 0.02 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 91.00 in Westwater Resources on October 14, 2024 and sell it today you would lose (15.00) from holding Westwater Resources or give up 16.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westwater Resources vs. Yanzhou Coal Mining
Performance |
| Timeline |
| Westwater Resources |
| Yanzhou Coal Mining |
Westwater Resources and Yanzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westwater Resources and Yanzhou Coal
The main advantage of trading using opposite Westwater Resources and Yanzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westwater Resources 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.| Westwater Resources vs. Yanzhou Coal Mining | Westwater Resources vs. Air Transport Services | Westwater Resources vs. TITANIUM TRANSPORTGROUP | Westwater Resources vs. Perseus Mining Limited |
| Yanzhou Coal vs. Sumitomo Rubber Industries | Yanzhou Coal vs. De Grey Mining | Yanzhou Coal vs. NEWELL RUBBERMAID | Yanzhou Coal vs. Martin Marietta Materials |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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