Correlation Between Sanyo Chemical and Yanzhou Coal
Can any of the company-specific risk be diversified away by investing in both Sanyo Chemical 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 Sanyo Chemical and Yanzhou Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanyo Chemical Industries and Yanzhou Coal Mining, you can compare the effects of market volatilities on Sanyo Chemical 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 Sanyo Chemical with a short position of Yanzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanyo Chemical and Yanzhou Coal.
Diversification Opportunities for Sanyo Chemical and Yanzhou Coal
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sanyo and Yanzhou is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sanyo Chemical Industries 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 Sanyo Chemical 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 Sanyo Chemical Industries 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 Sanyo Chemical i.e., Sanyo Chemical and Yanzhou Coal go up and down completely randomly.
Pair Corralation between Sanyo Chemical and Yanzhou Coal
Assuming the 90 days horizon Sanyo Chemical Industries is expected to generate 0.53 times more return on investment than Yanzhou Coal. However, Sanyo Chemical Industries is 1.89 times less risky than Yanzhou Coal. It trades about -0.05 of its potential returns per unit of risk. Yanzhou Coal Mining is currently generating about -0.18 per unit of risk. If you would invest 2,420 in Sanyo Chemical Industries on October 26, 2024 and sell it today you would lose (80.00) from holding Sanyo Chemical Industries or give up 3.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanyo Chemical Industries vs. Yanzhou Coal Mining
Performance |
| Timeline |
| Sanyo Chemical Industries |
| Yanzhou Coal Mining |
Sanyo Chemical and Yanzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanyo Chemical and Yanzhou Coal
The main advantage of trading using opposite Sanyo Chemical and Yanzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanyo Chemical 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.| Sanyo Chemical vs. American Eagle Outfitters | Sanyo Chemical vs. Northern Data AG | Sanyo Chemical vs. Linedata Services SA | Sanyo Chemical vs. GEAR4MUSIC LS 10 |
| Yanzhou Coal vs. China Shenhua Energy | Yanzhou Coal vs. PT Bayan Resources | Yanzhou Coal vs. Yancoal Australia | Yanzhou Coal vs. Whitehaven Coal Limited |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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