Correlation Between Yancoal Australia and Indo Tambangraya
Can any of the company-specific risk be diversified away by investing in both Yancoal Australia and Indo Tambangraya 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 Yancoal Australia and Indo Tambangraya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yancoal Australia and Indo Tambangraya Megah, you can compare the effects of market volatilities on Yancoal Australia and Indo Tambangraya 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 Yancoal Australia with a short position of Indo Tambangraya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yancoal Australia and Indo Tambangraya.
Diversification Opportunities for Yancoal Australia and Indo Tambangraya
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yancoal and Indo is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Yancoal Australia and Indo Tambangraya Megah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Tambangraya Megah and Yancoal Australia 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 Yancoal Australia are associated (or correlated) with Indo Tambangraya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Tambangraya Megah has no effect on the direction of Yancoal Australia i.e., Yancoal Australia and Indo Tambangraya go up and down completely randomly.
Pair Corralation between Yancoal Australia and Indo Tambangraya
Assuming the 90 days horizon Yancoal Australia is expected to generate 0.91 times more return on investment than Indo Tambangraya. However, Yancoal Australia is 1.1 times less risky than Indo Tambangraya. It trades about 0.07 of its potential returns per unit of risk. Indo Tambangraya Megah is currently generating about 0.01 per unit of risk. If you would invest 288.00 in Yancoal Australia on September 1, 2024 and sell it today you would earn a total of 147.00 from holding Yancoal Australia or generate 51.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.26% |
| Values | Daily Returns |
Yancoal Australia vs. Indo Tambangraya Megah
Performance |
| Timeline |
| Yancoal Australia |
| Indo Tambangraya Megah |
Yancoal Australia and Indo Tambangraya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yancoal Australia and Indo Tambangraya
The main advantage of trading using opposite Yancoal Australia and Indo Tambangraya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yancoal Australia position performs unexpectedly, Indo Tambangraya 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 Indo Tambangraya will offset losses from the drop in Indo Tambangraya's long position.| Yancoal Australia vs. New Hope | Yancoal Australia vs. Thungela Resources Limited | Yancoal Australia vs. Whitehaven Coal Limited | Yancoal Australia vs. China Coal Energy |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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